Effects of the excise tax on demerit goods on public health

Millions of people die and tens of millions of people are faced with chronic health problems every year due to diseases associated with the uncontrolled and harmful consumption of tobacco and tobacco products, alcoholic beverages, sugar-sweetened soft drinks. The impact of diseases caused by the consumption of these products, which are classified as demerit goods, on the global economy is estimated to be 2.9 trillion US dollars per year. The destructive consumption of these products threaten to the public health of countries, as well as economic, fiscal and social damage. The burdens created by the inaccurate consumption of demerit goods on the public, constitute the problem of the thesis. The aim of the study is to analyze the effect of excise tax on demerit goods on public health. For this purpose; the relationship between excise taxes on consumer products related to diseases that threaten public health such as cancer, obesity, type-2 diabetes, cardiovascular diseases, stroke, and stroke are examined. In this sense, panel data analysis is applied by forming a country group covering eight countries, especially Turkey in the study. For each country, excise tax burdens on tobacco and tobacco products and alcoholic beverages per capita between 2006-2019 are determined as independent variables. In the model, loss of healthy life years and burden of disease (DALY) values caused by the diseases related to the consumption of these products are also included as dependent variables. In the analysis, it is concluded that the correlation relations between the variables in the model and the coefficients are significant. In the series, it is determined that there is no cross-section dependence as a result of the cross-section dependence test, and CADF and CIPS tests are applied to test the stationarity. As a result of the CIPS test; it is concluded that the dependent variable DALY and alcoholic beverages excise tax burden variables are stationary at the 5% significance level, and at the 1% significance level for tobacco and tobacco products. According to the results of the stationarity analysis, the panel least squares method is preferred and the model is estimated. As a result of the analyse, it is determined that there is a significant relationship between the dependent variable Y(DALY) and the two independent variables at the 1% significance level. As a result of the panel, it is concluded that the relationship between the excise tax burden per capita on alcoholic beverages and DALY values does not have a significant and strong effect, but there is a significant and effective relationship between the excise tax burden on tobacco and tobacco products and DALY values per capita. In this case, it is concluded that for country groups, the effect of excise tax on alcoholic beverages on public health outcomes is weak, while excise tax on tobacco and tobacco products are effective.