Three Essays on Economics of Smoking Smuggled Cigarettes

• Main Authors: Hsin-Fan Chen, 陳信帆
• Other Authors: Huei-Yann Jeng
• Format: Others
• Language: en_US
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/51850639355606272428

博士 === 國立中興大學 === 應用經濟學系所 === 96 === This dissertation is composed of three essays focusing on the issue of smuggled cigarettes in Taiwan. Specifically, I discuss the individual’s behavior on smoking smuggled cigarettes. Smuggled cigarettes cause the loss of tax revenues to the government and harm people’s health, besides it is an international issue for discussion and should not be ignored. However, individual smoking behavior of smuggled cigarette is little known and difficult to study due to data limitations. It is hoped that this dissertation will be an important reference for Taiwanese public health authorities to draw up policies preventing smuggled cigarettes. The first essay applies the Latent Class Model for identifying the potential smokers who either now or ever consuming smuggled cigarettes. This methodology, in contrast to traditional discrete models for smoking behavior, allows endogenously classify potential smokers who are likely inclined to smoke smuggled cigarettes. The empirical result indicates that a number of socio-demographic factors do increases the inclination to smoking smuggled cigarettes after accounting for the unobserved heterogeneity in smoking smuggled cigarettes. In particular, monthly income exhibits negatively significant effect for the higher inclination group. Both education years and southern residence play a key role in smoking smuggled tobacco for both high and low inclination group. The second essay examines whether risk perceptions affect smoking smuggled cigarettes. The endogenous switching model is utilized to evaluate the effect of risk perceptions for smoker’s concern on health risk and tobacco quality, since risk perception may be endogenous with smoking smuggled cigarettes. Empirical result indicates that health risk is endogenous on smoking decision. Furthermore, smokers with more risk perceptions would be less likely to smoke smuggled cigarettes. Besides, the relevant social economic status of smokers, such as weekly cigarette expenditure, gender, age, and southern residence, are also statistically significant related to smoking smuggled cigarettes. The last paper, using Multiple Logistic Regression, evaluates whether smokers with high price sensitivity due to socio-economic disadvantages differ significantly in characteristics, and may be more inclined to smoke smuggled cigarettes. The smokers who are incline to smoke smuggled cigarettes in response to cigarette price increases are classified into three cigarette price levels. The study results show that price sensitive smokers with a personal monthly income of less than NT$10,000 have a 24% probability of being more inclined to smoke smuggled cigarettes; price sensitive smokers who are less educated have a 21% probability; and those who have experience in purchasing smuggled cigarettes have a 31% probability. It is important for government to apply different marketing strategies to different groups for prevention of smoking, especially for the focused group of low income and education level, and the government should know about their possible motivation, attitudes, behaviors and opinions of smoking smuggled cigarettes in response to price increasing.