Background: South Africa has since 1994 consistently increased the excise tax on cigarettes to maintain a total tax burden of 50% (1997-2003) and 52% (after 2004) of the average retail selling price. Between 1994 and 2004, the real (inflation-adjusted) excise tax increased by 249%, and the average real retail price of cigarettes increased by 110%. In addition, advertising and smoking bans were implemented in 2001. These measures, which we collectively refer to as tax-led, coincided with a 46% decrease in per capita consumption of cigarettes. No evaluation of South Africa's tobacco control policies has created a counterfactual of what would have happened if the tax-led measures had not occurred.
Objective: (1) To create a credible counterfactual of what would have happened to per capita cigarette consumption if the tax-led measures had not happened. (2) To use this counterfactual to estimate their impact on cigarette consumption in South Africa.
Method: We use a synthetic control method to create a synthetic South Africa, as a weighted average of countries (the 'donor pool') that are similar to South Africa, but that did not engage in large-scale tobacco control measures between 1990 and 2004.
Results: Per capita cigarette consumption would not have continued declining in the absence of the tax-led measures that began in 1994. By 2004, per capita cigarette consumption was 36% lower than it would have been in the absence of the tax-led measures. These results, which we mostly attribute to tax increases, are robust to different specifications of the 'donor pool'.
Conclusions: Significant public health dividends can be obtained by consistently increasing the real tax on cigarettes.
Keywords: Economics; Low/Middle income country; Price; Public policy; Taxation.
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