Relationship Between Age And Response To Cigarette Tax Increase Finance Essay Finance Essay

Lewit and Coate ( 1982 ) was one of the earliest researches to hold done to happen the impact of age on response to cigarette revenue enhancement utilizing secondary informations from the Health Interview Survey ( 1976 ) in the U.S which consisted interviews of 28,033 persons. Lewit and Coate ( 1982 ) had excluded informations from sample life near province boundary lines because they think these tobacco users can buy cheaper coffin nail from neighboring provinces easy. To acquire the empirical consequences, they were utilizing an Ordinary Least Square method. Finally they found that overall snap among those 20-25 old ages was -0.89, which was twice every bit high as grownup tobacco users at -0.42. Therefore they concluded that there was an reverse relationship between age and monetary value snap.

In recent old ages, Sylvain ( 2007 ) had revisited the same subject which investigates the consequence of revenue enhancement on coffin nail ingestion among young person and grownups. To execute the analysis, the writer was utilizing secondary informations set that contains information on smoking ingestion from 49 provinces from 1986 to 2006 incorporating 1050 observations which obtained from the CDC ‘s Behavioral Risk Factor Surveillance System ( BRFSS ) . In order to find the consequence of revenue enhancement on coffin nail ingestion for both young person tobacco users and grownup tobacco users, the writer applied the multiple additive arrested development theoretical accounts to compare and contrast the consequence of revenue enhancement rate on the per centum of grownup and teenage tobacco users every bit good as the figure of coffin nails they smoked over clip. Using on multiple additive arrested development informations analysis, he found that when coffin nail revenue enhancement were imposed, per centum of grownup tobacco users did non cut down or response with revenue enhancement. However, the per centum of immature tobacco users decreased significantly as cigarette revenue enhancement increased and it besides be shown that the mean figure of coffin nails smoked per twenty-four hours will cut down among young person tobacco users.

Similar research was done by DeCicca and McLeod ( 2008 ) , they used the grounds from recent big revenue enhancement increased in United States to analyze the impact of coffin nail revenue enhancement on young person and older grownup smoking behavior. In order to execute the analysis, they employed a set of secondary informations which obtained from the Behavioral Risk Factor Surveillance System ( BRFSS ) from 2002 to 2005 which was an one-year telephone study of grownups aged 18 old ages and older, across the United States. They, so used two smoke steps which were foremost measured an single smoke on all yearss and 2nd measured an single smoke on some yearss. Given the repeated cross-sectional nature of informations from the BRFSS, they employed sensitiveness analysis as their empirical scheme in placing the impact of province coffin nail revenue enhancements on the smoke engagement among young person and older grownups. In amount, the research workers found that young person tobacco users will be more antiphonal towards the coffin nail monetary value increased which would impact in a decrease of smoking behavior among them.

2.2.2 Relationship between gender and response to cigarette revenue enhancement addition

Chaloupka ( 1990 ) had performed a research in United States to analyse the differences in male/female smoking behavior specifically within the rational dependence model. Datas from Second National Health and Nutrition Examination Survey were used. This study contained informations from 28,000 people ages 6 month to 74 old ages old from 1976 to 1980. Then, based on the single provinces of abode, Chaloupka ( 1990 ) inputted the coffin nail monetary value and strike revenue enhancement into the information set. Performing a least square estimation with the demand theoretical account from the rational dependence model, he found that adult females by and large did non alter ingestion of coffin nail given monetary value addition. Men, nevertheless, had a long tally monetary value snap runing from -0.643 to -0.536.

However, a recent survey by Stehr ( 2007 ) had contradicted old consequence. He found that if they controlled for gender-specific province fixed consequence, consequence shows that adult females was more antiphonal to cigarette revenue enhancement than work forces. State fixed consequence is the spread between proportion of male and female tobacco users in different provinces in the U.S. Stehr ( 2007 ) pull informations from 1985 to 2000 from Behaviorial Risk Factor Surveillance System ( BRFSS ) which was a telephone questionnaire to supervise behavior and feature of the population 18 old ages old and above regarding activity that caused morbidity and mortality. Stehr ( 2007 ) so employed a probit and ordinary least square arrested development on the information in executing an analysis. To reason the survey, the consequences will bespeak that the adult females were twice every bit antiphonal to cigarette revenue enhancement as work forces.

2.2.3 Relationship between instruction degree and response to cigarette revenue enhancement addition

Madden ( 2007 ) had performed a research in analyzing whether the response to cigarette revenue enhancement increased differ by different educational background in Ireland. The writer collected the information from a study known as the Saffron study, which was carried out by the Centre for Health Economics at University College Dublin. This study was to ask adult females ‘s apprehension, cognition and consciousness of their lifetime wellness demands. Using a split-population theoretical account and log-logistic continuance theoretical account as his empirical schemes in examines the determination to get down smoke, he concluded that there is a stronger consequence of revenue enhancement for intermediate instruction and has weaker consequence for those with least instruction.

In add-on, Gruber and Koszegi ( 2004 ) had completed a similar research in analyzing the reactivity on educational degree due to cigarette revenue enhancement addition. To execute the analysis, their appraisal was based on a monetary value per battalion in the scope of $ 1.50 to $ 2.50. They employed an empirical scheme which based on clip incompatibility and differential monetary value response on high and low educational, every bit good as income groups. In amount, they found that tobacco users who have low instruction making may be more antiphonal to monetary values than tobacco users with high instruction making. Therefore, tobacco users with lower instruction making may cut cost in coffin nail ingestion more than tobacco users with high instruction making.

2.2.4 Relationship between Income degree and response to cigarette revenue enhancement addition

Biener et Al. ( 1998 ) had made a survey in measuring the tobacco users ‘ reactions to a 25sen coffin nail revenue enhancement imposed in Massachusetts which ensuing in a 15 % additions in the mean monetary value per battalion. Data was obtained through telephone interviews in between October 1993 to March 1994 through random-digit-dialing technique. A sum of 4733 grownup interviews and 1606 young person interviews were conducted with response rate of 78 % and 75 % severally. They applied polynomial logistic arrested development theoretical account as their empirical scheme in measuring the tobacco users ‘ response. Through polynomial logistic arrested development, they found out those with lower incomes were 3 times more likely to cut cost on smoking than those with higher income and twice every bit likely to see discontinuing.

Similar research was besides done by Townsend et Al. ( 1994 ) . To execute the analysis, they employed secondary informations from the British general family study in between 1972 to 1990. Townsend et Al. ( 1994 ) classified the proportion of grownups presently smoking one or more coffin nail a twenty-four hours and figure of coffin nail smoked per tobacco user harmonizing sex, age and socioeconomic group. They applied the econometric multiple arrested development analysis to analyze how the smoke forms of different socioeconomic and age groups were influenced by monetary value, income and wellness promotion consequence. They found that addition in cigarette revenue enhancement will strongly cut down the prevalence of smoke in lower income groups.

In a recent surveies which were completed by Colman and Remler ( 2004 ) . They had made a survey to research the response to cigarette revenue enhancement addition among low and high income group within a given population. In order to execute the analysis, the research workers used secondary informations obtained from the Current Population Survey March Income Supplement, which contained peculiarly accurate income information. They employed a multiple arrested development theoretical account as their empirical scheme to gauge the consequence of revenue enhancement addition. Under this method, it consists of three parts. First, gauge how cigarette monetary value sensitiveness of smoking behavior varies by income group. Second, those appraisals were used to foretell how the different income groups respond to a coffin nail revenue enhancement addition. Third, they determined the deductions of those behaviors alterations for alterations in the progressiveness of the coffin nail revenue enhancements. They concluded that lower income group is much more monetary value medium than higher income group. Consequently, addition in cigarette revenue enhancement would cut down smoke among tobacco users in lower income group.

2.2.5 Relationship between smoking grade and response to cigarette revenue enhancement addition

Smoking grade is used as the placeholder for degree of dependence to smoke. Lee, Hwang, Ye, and Chen ( 2004 ) had gauged the consequence of smoking grade on the response to a new coffin nail revenue enhancement strategy in Taiwan. Using Ordinary Least Square method, they found that heavy tobacco users ( those who smoked more than 2 battalions of coffin nail per twenty-four hours ) did non cut down coffin nail ingestion. Amazingly, they increased their ingestion, giving a monetary value snap of 0.2573. Their sample came from tobacco users age 17 to 69 in a study conducted by the Taiwan National Health Research Institute.

Further research by Lee ( 2008 ) studied the consequence of smoking grade on response to cigarette revenue enhancement. He employed a cross-sectional survey on 483 tobacco users aged 15 old ages or more from all 23 major metropoliss and states in Taiwan conducted through telephone study between April to July 2004. Response rate from samples was 50.15 % . Lee ( 2008 ) defined heavy tobacco users to be those who smoke more than 2 battalions of coffin nail a twenty-four hours, moderate tobacco users as 1 to 2 battalions a twenty-four hours and light tobacco users as less than 1 battalion a twenty-four hours. He has found that moderate tobacco users are more antiphonal to cigarette revenue enhancement than visible radiation or heavy tobacco users.

In recent old ages, research done by Ouellet, Restuccia, Tellier, and Lacrois ( 2010 ) had opposed the old research done, where the old researches studied the consequence sing to cigarette revenue enhancement addition. In contrast, research completed by them was look intoing the impact on coffin nail ingestion behavior in Canada sing to the decrease of coffin nail revenue enhancement. This research was based on primary informations obtained via a study that consists of four rhythms. The study was designed to supply a representative sample of Canadians aged 15 old ages and older which conducted through random-digit dialing. As the 4th phase of the study was completed, there are a sum of 11,119 persons who had responded to all four rhythms. In order to analyse the informations, they were using a multivariate binary logistic arrested development theoretical accounts as their empirical schemes. As a consequence, the research workers found that at single degree, heavy tobacco users ‘ behavior would be less affected by a revenue enhancement diminution than light tobacco users ‘ behavior which was upheld their initial hypotheses they made.

2.3 Proposed Conceptual Framework

Figure 2.1: Socio-economic Factors ( Age, Gender, Education and Monthly Income ) and Smoking Degree Effect on Responses to Cigarette Tax Increase to RM10 per Pack

Adapted from: Lee ( 2008 ) , Biener et Al. ( 1998 )

2.4 Hypothesis Development

H1: Younger tobacco users are more likely to discontinue smoke than older tobacco users given coffin nails revenue enhancement addition.

H2: Male tobacco users are more likely to give no response to cigarette revenue enhancement addition than female tobacco users.

H3: Highly educated tobacco users are more likely to discontinue smoking than less educated tobacco users given coffin nails revenue enhancement addition.

H4: Lower income tobacco users are more likely to cut cost than higher income tobacco users given coffin nails revenue enhancement addition.

H5: Heavy tobacco users are more likely to give no response to coffin nails revenue enhancement addition than light tobacco users.

2.5 Decision

In general, this chapter focuses on the theoretical construct and the old empirical surveies. Rational dependence theory is the most suited theory for our survey and the literature reviews give us some counsel to execute our research. The conceptual model gives a clearer image on our research independent variables ( age, gender, instruction degree, monthly income, and smoking grade ) and dependent variable ( the tobacco users ‘ response to the coffin nail revenue enhancement increased ) . Hypothesis had developed and we will prove the credence of the hypothesis in our survey.