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Cigarette tax revenues and tobacco control in Japan

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  • Junmin Wan

Abstract

The hypotheses of non-addiction, myopia and rational addiction are tested using annual, quarterly and monthly data. Changes in the prices of Japanese cigarettes can be viewed as exogenous from the point of view of consumer behaviour, because the Japanese government controls cigarette prices. The empirical results of this paper support the addiction hypothesis. The short-run and long-run price elasticities range from -0.338 to -0.421, and from -0.679 to -0.686, respectively; thus, increases in tax revenues in the long run are likely to be smaller than those in the short run. As a result, tax increases would be an effective means of curbing smoking and reducing its social cost. Furthermore, the debt compensation programmes for the Japan Railway and the National Forestry will not go according to plan, unless revenues are increased in the future.

Suggested Citation

  • Junmin Wan, 2006. "Cigarette tax revenues and tobacco control in Japan," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1663-1675.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:14:p:1663-1675
    DOI: 10.1080/00036840500426900
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    Cited by:

    1. Eiji Yamamura, 2016. "Effects of Female Labor Participation on Smoking Behavior in Japan: Selection Model Approach," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 59(3), pages 1-18.
    2. Thomas Demuynck & Ewout Verriest, 2013. "I’Ll Never Forget My First Cigarette: A Revealed Preference Analysis Of The “Habits As Durables” Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 717-738, May.
    3. repec:plo:pone00:0231960 is not listed on IDEAS
    4. Myong‐Il Kang & Shinsuke Ikeda, 2014. "Time Discounting And Smoking Behavior: Evidence From A Panel Survey," Health Economics, John Wiley & Sons, Ltd., vol. 23(12), pages 1443-1464, December.
    5. Myong-Il Kang & Shinsuke Ikeda, 2010. "Time Discounting and Smoking Behavior under Tax Hikes," ISER Discussion Paper 0782, Institute of Social and Economic Research, The University of Osaka.
    6. Rajeev Goel & Xingyuan Zhang, 2013. "Gender dynamics and smoking prevalence in Japan," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(4), pages 622-636, October.
    7. R. Duarte & J. Escario & J. Molina, 2014. "Are estimated peer effects on smoking robust? Evidence from adolescent students in Spain," Empirical Economics, Springer, vol. 46(3), pages 1167-1179, May.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

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