Illicit cigarette consumption and government revenue loss in Indonesia.

BACKGROUND: Illicit cigarettes comprise more than 11% of tobacco consumption and 17% of consumption in low- and middle-income countries. Illicit cigarettes, defined as those that evade taxes, lower consumer prices, threaten national tobacco control efforts, and reduce excise tax collection. METHODS: This paper measures the magnitude of illicit cigarette consumption within Indonesia using two methods: the discrepancies between legal cigarette sales and domestic consumption estimated from surveys, and discrepancies between imports recorded by Indonesia and exports recorded by trade partners. Smuggling plays a minor role in the availability of illicit cigarettes because Indonesians predominantly consume kreteks, which are primarily manufactured in Indonesia. RESULTS: Looking at the period from 1995 to 2013, illicit cigarettes first emerged in 2004. When no respondent under-reporting is assumed, illicit consumption makes up 17% of the domestic market in 2004, 9% in 2007, 11% in 2011, and 8% in 2013. Discrepancies in the trade data indicate that Indonesia was a recipient of smuggled cigarettes for each year between 1995 and 2012. The value of this illicit trade ranges from less than $1 million to nearly $50 million annually. Singapore, China, and Vietnam together accounted for nearly two-thirds of trade discrepancies over the period. Tax losses due to illicit consumption amount to between Rp 4.1 and 9.3 trillion rupiah, 4% to 13% of tobacco excise revenue, in 2011 and 2013. CONCLUSIONS: Due to the predominance of kretek consumption in Indonesia and Indonesia's status as the predominant producer of kreteks, illicit domestic production is likely the most important source for illicit cigarettes, and initiatives targeted to combat this illicit production carry the promise of the greatest potential impact.

Empirical measurement of illicit tobacco trade in the Philippines.

Cigarette smuggling reduces the price of cigarettes, thwarts youth access restrictions, reduces government revenue, and undercuts the ability of taxes to reduce consumption. The tobacco industry often opposes increases to tobacco taxes on the claim that greater taxes induce more smuggling. To date, little is known about the magnitude of smuggling in the Philippines. his information is necessary to effectively address illicit trade and to measure the impacts of tax changes and the introduction of secure tax markings on illicit trade. This study employs two gap discrepancy methods to estimate the magnitude of illicit trade in cigarettes for the Philippines between 1994 and 2009. First, domestic consumption is compared with tax-paid sales to measure the consumption of illicit cigarettes. Second, imports recorded by the Philippines are compared with exports to the Philippines by trade partners to measure smuggling. Domestic consumption fell short of tax-paid sales for all survey years. The magnitude of these differences and a comparison with a prevalence survey for 2009 suggest a high level of survey under-reporting of smoking. In the late 1990s and the mid 2000s, the Philippines experienced two sharp declines in trade discrepancies, from a high of $750 million in 1995 to a low of $133.7 million in 2008. Discrepancies composed more than one-third of the domestic market in 1995, but only 10 percent in 2009. Hong Kong, Singapore, and China together account for more than 80 percent of the cumulative discrepancies over the period and 74 percent of the discrepancy in 2009. The presence of large discrepancies supports the need to implement an effective tax marking and tobacco track and trace system to reduce illicit trade and support tax collection. The absence of a relation between tax changes and smuggling suggests that potential increases in the excise tax should not be discouraged by illicit trade. Finally, the identification of specific trade partners as primary sources for illicit trade may facilitate targeted efforts in cooperation with these governments to reduce illicit trade.

The ranking of alternative tariff and quota policies in the presence of domestic monopoly

Bhagwati demonstrated the nonequivalence between tariffs and quotas in the presence of monopoly. This paper also assumes domestic production to be monopolized and shows that giving import licenses or tariff revenues to the domestic producer may raise or lower the welfare cost of protection and the price paid by consumers from the price under other tariff and quota arrangements which maintain the same market share for the domestic producer. However, if the monopolist realizes that commercial policy is an instrument used to maximize the policymaker's welfare function, instead of being a goal in itself, the equivalence of tariffs and quotas re-emerges. © 1977.

Prenegotiation public commitment in domestic and international bargaining

We use a formal bargaining model to examine why, in many domestic and international bargaining situations, one or both negotiators make public statements in front of their constituents committing themselves to obtaining certain benefits in the negotiations. We find that making public commitments provides bargaining leverage, when backing down from such commitments carries domestic political costs. However, when the two negotiators face fairly similar costs for violating a public commitment, a prisoner's dilemma is created in which both sides make high public demands which cannot be satisfied, and both negotiators would be better off if they could commit to not making public demands. However, making a public demand is a dominant strategy for each negotiator, and this leads to a suboptimal outcome. Escaping this prisoner's dilemma provides a rationale for secret negotiations. Testable hypotheses are derived from the nature of the commitments and agreements made in equilibrium.

Consumption of cyanogenic bamboo by a newly discovered species of bamboo lemur

Three species of bamboo‐eating lemurs were found to be sympatric in the southeastern rain forests of Madagascar. Sympatric species generally differ in habitat utilization or diet, but these three closely related bamboo lemurs lived in the same habitat and all ate bamboo. Behavioral observation revealed that they did select different parts of the bamboo, and chemical analyses confirmed that there was a difference in the secondary compound content present in those selections. The growing tips of Cephalostachyum ef uiguieri selected by the golden bamboo lemur (Hapalemuraureus) contained 15 mg of cyanide per 100 g fresh weight bamboo while the leaves of C. perrieri selected by the gentle bamboo lemur (H. griseus)and the mature culms of C. cf uiguieri selected by the greater bamboolemur (H. simus) did not contain cyanide. Since each individual golden bamboo lemur ate about 500 g of bamboo per day, they daily ingestedabout 12 times the lethal dose of cyanide. The mechanism by which this small primate avoids the acute and chronic symptoms of cyanide poisioning is unknown. Copyright © 1989 Wiley‐Liss, Inc., A Wiley Company

The empirical analysis of cigarette tax avoidance and illicit trade in Vietnam, 1998-2010.

Illicit trade carries the potential to magnify existing tobacco-related health care costs through increased availability of untaxed and inexpensive cigarettes. What is known with respect to the magnitude of illicit trade for Vietnam is produced primarily by the industry, and methodologies are typically opaque. Independent assessment of the illicit cigarette trade in Vietnam is vital to tobacco control policy. This paper measures the magnitude of illicit cigarette trade for Vietnam between 1998 and 2010 using two methods, discrepancies between legitimate domestic cigarette sales and domestic tobacco consumption estimated from surveys, and trade discrepancies as recorded by Vietnam and trade partners. The results indicate that Vietnam likely experienced net smuggling in during the period studied. With the inclusion of adjustments for survey respondent under-reporting, inward illicit trade likely occurred in three of the four years for which surveys were available. Discrepancies in trade records indicate that the value of smuggled cigarettes into Vietnam ranges from $100 million to $300 million between 2000 and 2010 and that these cigarettes primarily originate in Singapore, Hong Kong, Macao, Malaysia, and Australia. Notable differences in trends over time exist between the two methods, but by comparison, the industry estimates consistently place the magnitude of illicit trade at the upper bounds of what this study shows. The unavailability of annual, survey-based estimates of consumption may obscure the true, annual trend over time. Second, as surveys changed over time, estimates relying on them may be inconsistent with one another. Finally, these two methods measure different components of illicit trade, specifically consumption of illicit cigarettes regardless of origin and smuggling of cigarettes into a particular market. However, absent a gold standard, comparisons of different approaches to illicit trade measurement serve efforts to refine and improve measurement approaches and estimates.

Monitoring maternal Beta carotene and retinol consumption may decrease the incidence of neurodevelopmental disorders in offspring.

Retinoic acids (13-cis and 13-trans) are known teratogens, and their precursor is retinol, a form of vitamin A. In 1995, Rothman et al demonstrated an association between excessive vitamin A, >10,000 IU/day, during the first trimester of pregnancy and teratogenic effects, particularly in the central nervous system. However, vitamin A deficiency has long been known to be deleterious to the mother and fetus. Therefore, there may be a narrow therapeutic ratio for vitamin A during pregnancy that has not previously been fully appreciated. Neurodevelopmental disorders may not be apparent by macroscopic brain examination or imaging, and proving the existence of a behavioral teratogen is not straightforward. However, an excess of retinoic acid and some neurodevelopmental disorders are both associated with abnormalities in cerebellar morphology. Physical and chemical evidence strongly supports the notion that beta carotene crosses the placenta and is metabolized to retinol. Only very limited amounts of beta carotene are stored in fetal fat cells as evidenced by the fact that maternal fat is yellow from beta carotene, whereas non-brown neonatal fat is white. Furthermore, newborns of carotenemic mothers do not share the yellow complexion of their mothers. The excess 13-trans retinoic acid derived from metabolized beta carotene in the fetus increases the concentration of the more teratogenic 13-cis retinoic acid since the isomerization equilibrium is shifted to the left. Therefore, this paper proposes that consideration be given to monitoring all potential sources of fetal 13-cis and 13-trans retinoic acid, including nutritional supplements, dietary retinol, and beta carotene, particularly in the first trimester of pregnancy.

Impacts of land use change and climate variations on annual inflow into Miyun Reservoir,Beijing, China

The Miyun Reservoir, the only surface water source for Beijing city, has experienced water supply decline in recent decades. Previous studies suggest that both land use change and climate contribute to the changes of water supply in this critical watershed. However, the specific causes of the decline in the Miyun Reservoir are debatable under a non-stationary climate in the past 4 decades. The central objective of this study was to quantify the separate and collective contributions of land use change and climate variability to the decreasing inflow into the Miyun Reservoir during 1961–2008. Different from previous studies on this watershed, we used a comprehensive approach to quantify the timing of changes in hydrology and associated environmental variables using the long-term historical hydrometeorology and remote-sensing-based land use records. To effectively quantify the different impacts of the climate variation and land use change on streamflow during different sub-periods, an annual water balance model (AWB), the climate elasticity model (CEM), and a rainfall–runoff model (RRM) were employed to conduct attribution analysis synthetically. We found a significant (p  <  0.01) decrease in annual streamflow, a significant positive trend in annual potential evapotranspiration (p  <  0.01), and an insignificant (p  >  0.1) negative trend in annual precipitation during 1961–2008. We identified two streamflow breakpoints, 1983 and 1999, by the sequential Mann–Kendall test and double-mass curve. Climate variability alone did not explain the decrease in inflow to the Miyun Reservoir. Reduction of water yield was closely related to increase in actual evapotranspiration due to the expansion of forestland and reduction in cropland and grassland, and was likely exacerbated by increased water consumption for domestic and industrial uses in the basin. The contribution to the observed streamflow decline from land use change fell from 64–92 % during 1984–1999 to 36–58 % during 2000–2008, whereas the contribution from climate variation climbed from 8–36 % during the 1984–1999 to 42–64 % during 2000–2008. Model uncertainty analysis further demonstrated that climate warming played a dominant role in streamflow reduction in the most recent decade (i.e., 2000s). We conclude that future climate change and variability will further challenge the water supply capacity of the Miyun Reservoir to meet water demand. A comprehensive watershed management strategy needs to consider the climate variations besides vegetation management in the study basin.