Effectiveness of cigarette tax in Japan
In this paper, we estimate the relationship between cigarette tax (price) and smoking behavior in Japan. We breaks smoking behavior into participation part and conditional demand part. With Keio Household Panel Survey (KHPS), we can identify the effect of cigarette price depending on intertempporal variation of cigarette price. Main results are as follows. First, effect of cigarette price is considerable and negative as expected. Particularly in case of male, cigarette price work on both participation and consumption. Thus cigarette tax increase is possible policy alternative to lower the smoking prevalence rate in Japan though decrease of tax revenue is not negligible. Second, effect of large tax increase in October 2010 is not as expected based on past performance. With various specification, effect of large tax increase in October 2010 is smaller than that of modest tax increase in July 2006 in estimates. This result implies accumulated effect of repeating modest cigarette tax increase is larger than effect of large cigarette tax increase even if total increment of cigarette price is the same. Third, there is considerable gender difference of sensitivity to cigarette price. While estimates in participation equation seems almost the same, elasticity differs a lot. In addition, consumption elasticities of male is by far larger than those of female. Thus for most of female, alternatives are smoking as in the past or quit smoking when confronting the cigarette tax increase. Fourth, there is strong evidence for recent anti-smoking trend in Japan. Though our proxy is how many years have passed since the enforcement of Health Promotion Law and thus somehow inaccurate, including the variable considerable change the estimates of cigarette price and is itself significant. Therefore, to explore how cigarette tax works in recent Japan, how to control the anti-smoking trend is unavoidable issue. Additionally we seek to obtain more reliable elasticities with various specifications. When we use dataset consists of who has ever smoked in recent years, elasticities seem most trustworthy.
|Date of creation:||Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 2-15-45, Mita, Minato-ku, Tokyo 108-8345|
Web page: http://ies.keio.ac.jp/old_project/old/gcoe-econbus/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Craig A. Gallet & John A. List, 2003. "Cigarette demand: a meta-analysis of elasticities," Health Economics, John Wiley & Sons, Ltd., vol. 12(10), pages 821-835.
- Philip DeCicca & Donald Kenkel & Alan Mathios & Yoon-Jeong Shin & Jae-Young Lim, 2008.
"Youth smoking, cigarette prices, and anti-smoking sentiment,"
John Wiley & Sons, Ltd., vol. 17(6), pages 733-749.
- Philip DeCicca & Donald S. Kenkel & Alan D. Mathios & Yoon-Jeong Shin & Jae-Young Lim, 2006. "Youth Smoking, Cigarette Prices, and Anti-Smoking Sentiment," NBER Working Papers 12458, National Bureau of Economic Research, Inc.
- Jae Bong Chang & Jayson L. Lusk & F. Bailey Norwood, 2007. "How Closely Do Hypothetical Surveys and Laboratory Experiments Predict Field Behavior?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 518-534.
- Hidayat, Budi & Thabrany, Hasbullah, 2010. "Cigarette smoking in Indonesia: examination of a myopic model of addictive behaviour," MPRA Paper 30194, University Library of Munich, Germany, revised 17 May 2010.
- Chen, Yuyu & Xing, Weibo, 2011. "Quantity, quality, and regional price variation of cigarettes: Demand analysis based on a household survey in China," China Economic Review, Elsevier, vol. 22(2), pages 221-232, June.
- Nonnemaker, James M. & Farrelly, Matthew C., 2011. "Smoking initiation among youth: The role of cigarette excise taxes and prices by race/ethnicity and gender," Journal of Health Economics, Elsevier, vol. 30(3), pages 560-567, May.
When requesting a correction, please mention this item's handle: RePEc:kei:dpaper:2011-035. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Global COE Program Office)The email address of this maintainer does not seem to be valid anymore. Please ask Global COE Program Office to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.