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Cigarette Tax Revenues and Tobacco Control in Japan

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  • Junmin Wan

    (Osaka School of International Public Policy, Osaka University)

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 behavior, 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 programs 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, 2004. "Cigarette Tax Revenues and Tobacco Control in Japan," Discussion Papers in Economics and Business 04-11-Rev, Osaka University, Graduate School of Economics, revised Feb 2006.
    • Handle: RePEc:osk:wpaper:0411r
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    References listed on IDEAS

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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. Margaret Giorgio & Fredrick Makumbi & Simon Peter Sebina Kibira & Suzanne Bell & Selena Anjur-Dietrich & Elizabeth Sully, 2020. "Investigating the early impact of the Trump Administration’s Global Gag Rule on sexual and reproductive health service delivery in Uganda," PLOS ONE, Public Library of Science, vol. 15(4), pages 1-15, April.
    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, Osaka University.
    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.

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    More about this item

    Keywords

    smoking; rational addiction; tax revenues;
    All these keywords.

    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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