Time discounting and smoking behavior under tax hikes

Arbeitspapier

By combining our broad panel survey of Japanese adults from 2005 to 2008 and actual cigarette tax data, we investigate how smoking behavior including responses to tax hikes depends on time discounting and its biases, such as hyperbolic discounting and the sign effect. Cigarette consumption displays significantly positive correlations with discount rates and the procrastinating tendency, and negative correlations with the sign effect. Hyperbolic, procrastinating, and naïve respondents decrease their after-tax-hike cigarette consumption more than the others, implying that, irrespective of the preannouncement of a future tax hike, they postpone smoking moderation until the tax hike actually takes place. Finally, the government's revenue from cigarette tax peaks at a JPY 29.92 (around USD 0.28 using the conversion rate [107.16] in February 2008) higher tax per cigarette than the present actual level.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 782

Classification and Topics

• Classification: Wirtschaft ; Health: Government Policy; Regulation; Public Health ; Other Special Topics: General
• Subject: smoking ; cigarette tax ; time preference ; discount rate ; hyperbolic discounting ; procrastination ; the sign effect ; Rauchen ; Zeitpräferenz ; Tabaksteuer ; Konsumentenverhalten ; Abzinsung ; Japan

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kang, Myong-Il ; Ikeda, Shinsuke
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/92575
• Last update: 10.03.2025, 11:43 AM CET