Fiscal Policies’ Impacts on Albanian Household Economic Well-being

This Policy Brief was written by Development Solutions Associates (DSA) in Albania. The policy brief assesses the impact of raising tobacco excise taxes on household spending patterns. Specifically, the researchers estimate the impact of increasing the tobacco excise rate by 4%, 5%, and 6%. Spending on housing would increase by ALL 178 million at a 4% increase, ALL 310 million at a 5% increase, and ALL 442 million at a 6% increase. Similarly, education spending would increase by ALL 323 million, ALL 564 million, and ALL 803 million in each scenario, respectively. Spending on clothing would rise moderately, by ALL 118 million, ALL 206 million, and ALL 294 million, respectively. On the other hand, increasing the excise tax by 4%, 5%, and 6% would reduce spending on alcohol by ALL 114 million, ALL 199 million, and ALL 283 million, respectively. The policy brief concludes with recommendations for policy makers to raise tobacco excise taxes to improve economic well-being in households.  

A corresponding Working Paper can be found here, and a related policy brief can be found here.