The Economics of Harm Reduction
At the recent Innovation Summit Southeast Asia 2023, Benedict Weerasena (Research Director) of Bait Al Amanah was invited to present on The Economics of Harm Reduction. The recording of the presentation can be found on Youtube:
The Key Points of Benedict’s Presentation include:
Harm Reduction is a public health strategy to lessen the negative social and physical consequences associated with various human behaviours, both legal and illegal.
Harm Reduction is grounded in the following principles:
o Focusing on the prevention of harm, rather than the prevention of behaviour;
o Use of evidence-based policy and practice;
o Pro-Choice and a Commitment to Universal Human Rights;
o Empowerment of the individual as the primary agent responsible for reducing harm;
o Accepting behaviour change as an incremental process.
It is crucial to understand how people make decisions as rational individuals, by weighing the perceived benefits and perceived costs, instead of encouraging the government to step in to restrict certain behaviours.
Taxation on tobacco is regressive as the tax burden has the greatest impact on the households with the least income, due to the fact that tobacco consumption is relatively inelastic (Price-elasticity: -0.3 to -0.5 for cigarettes)
The hike in excise duties in the past decade has led to a rise in the incidence of illicit cigarettes across Malaysia, with over 4 out of 5 cigarettes smoked in the East Malaysian states of Sabah and Sarawak being illegal.
In the upcoming Control of Smoking Product for Public Health Bill 2023, it is crucial to incorporate a differentiated approach through risk proportionate taxation and less stringent regulations on less harmful non-combustible alternatives based on the risk continuum.
Favourable policies are essential to boost innovation and incentivise experimentation for market-based inventions to create more options towards smoking cessation.
Here are the PowerPoint slides of the presentation:
*The Innovation Summit Southeast Asia 2023 organized by the Center for Market Education (CME), in cooperation with the Property Rights Alliance and Tholos Foundation was held on 10 May 2023 at the Asia School of Business.