A combined tax and price framework (CTPF) computational tool typically estimates the impact of taxes and price adjustments on goods like tobacco and alcohol. It allows users to input various parameters such as current price, proposed tax increases, and price elasticity of demand to project potential outcomes like changes in consumption, revenue generation, and public health impacts. For example, such a tool might model the effects of a 10% excise tax increase on cigarette sales and related health costs.
These tools play a crucial role in informing policy decisions related to public health and revenue management. By providing evidence-based projections, they can assist governments in understanding the potential consequences of tax and price interventions, allowing for more effective strategies to curb consumption of harmful products or generate funding for public health initiatives. The development of these tools has been driven by the need for robust economic modeling in public health policy, particularly concerning products with known negative externalities.
