Income elasticity of education and smoking

The relationships among the income (expenditures) level, expenditure for education and tobacco consumption were analyzed based on the data of workers households reported in Family Income and Expenditure Survey of Japan between 1980 and 1995. For all the observed years, elasticities of tobacco to living expenditure were less than -0.4 and the deviation from zero point had increased (-0.41 in 1980, and -0.95 in 1995). By contrast, elasticities of education to living expenditure were over 1.5 for the observed period. In the case of income elasticity, values of tobacco were negative with the same chronological tendency as in elasticity to living expenditure and those of education were around 1.10. The findings regarding the relationship between income level and tobacco consumption was quite different from most of the studies conducted in western countries, which suggested a positive elasticity between the two. According to the present results, we discussed two strategies in order to reduce the smoking prevalence rate in Japan: education and an increase in the cigarette price by higher cigarette taxes.