Junmin Wan

The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data

In this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China?s household survey. We find that China?s household saving rate has been high and rising and that the main determinants of variations over time and over space therein are the lagged saving rate, the income growth rate, (in many cases) the real interest rate, and (in some cases) the inflation rate. However, we find that the variables relating to the age structure of the population have the expected impact on the household saving rate in only one of the four samples. These results provide mixed support for the life cycle hypothesis as well as the permanent income hypothesis, are consistent with the existence of inertia or persistence, and imply that China?s household saving rate will remain high for some time to come.

Cigarette tax revenues and tobacco control in Japan

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 behaviour, 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 programmes for the Japan Railway and the National Forestry will not go according to plan, unless revenues are increased in the future.

Effect of breastfeeding on childhood BMI and obesity: the China Family Panel Studies.

AbstractThe objective of this study is to investigate the effect of breastfeeding on childhood obesity in China.We used data collected from the China Family Panel Studies, an ongoing, prospective, and nationwide longitudinal study to explore the extensive and dynamic social changes in China. A total of 7967 children were included in the analysis. Duration of breastfeeding was first treated as a continuous variable and subsequently dichotomized into ever versus never, ≥6 months versus <6 months, ≥8 months versus < 8 months, and ≥12 months versus <12 months. Multiple imputation was conducted and regressions with propensity score matching were performed. We also performed quantile regression to examine whether breastfeeding has an effect on childhood obesity among children with a specific quantile of body mass index (BMI).Consistent with findings from recent studies, in both adjusted and adjusted regressions, we did not find any statistically significant effect of breastfeeding on reducing the risk of obesity (unadjusted odds ratio, OR = 1.02, 95% confidence interval, CI 0.99, 1.05, P = 0.12; adjusted OR 1.01, 95% CI 0.98, 1.05, P = 0.36) or excessive weight (unadjusted OR = 1.01, 95% CI 0.99, 1.03, P = 0.26; adjusted OR = 1.00, 95% CI 0.98, 1.02, P = 0.90). Results were similar using various dichotomization of duration of breastfeeding. Quantile regression revealed that longer duration of breastfeeding is associated with higher BMI among children with small to medium quantile of BMI.Our findings echo recent research and caution against any population-wide strategy in attempting to reduce overweight and obesity through promotion of breastfeeding.

The Incentive to Declare Taxes and Tax Revenue: The Lottery Receipt Experiment in China

We examine the validity of a new system of taxation called lottery receipts in China theoretically and empirically. Tax collection is difficult as the government difficultly monitors the actual economic dealings. To bring out the private information on transaction known only to a seller and a buyer, the government has set up a lottery receipt system which has been tried out in many areas. If the net revenue from a lottery receipt is invested in pure public goods, the lottery receipt will been purchased even if the consumer has expected quasi-linear utility. By issuing a lottery receipt, the government may prevent tax evasion caused by conspiracies between consumers and firms and collect tax effectively. Estimation is performed based on panel data for different periods from a total of 37 districts in Beijing and Tianjin during 1998-2003. The lottery receipt experiment has significantly raised the business tax, the growths of business tax and total tax revenues.

Rational Addiction with Optimal Inventories: Theory and Evidence from Cigarette Purchases in Japan

A model of rational addiction (RA) with optimal inventories is developed and empirically tested using data on purchases in Japan. If a consumer has information regarding a future price increase, then she may hoard addictive goods; in this case, the optimal inventory period increases with the price hike but decreases with the inventory cost. Owing to the creation of such inventories by consumers, the absolute value of the price elasticity of demand is smaller in the case of a price increase than in that of a price decrease, and this difference is especially salient in the short-run. The evidence provided by daily cigarette purchases is consistent with this asymmetric price effect. Monthly cigarette purchase data do not support the RA hypothesis when inventory is ignored, as inventory becomes an omitted variable that correlates with price; however, this hypothesis does find support if inventory is identified in the demand equation.

Are Gambling and Smoking Complementary? Direct Tests from Japanese Individual Data

Many studies have analyzed smoking and, subsequently, regulations have been made with respect to smoking because of its negative externality (i.e., it is a health hazard). Moreover, other studies have analyzed gambling in Japan and found that pachinko gambling causes an addiction to the game, which often leads to household bankruptcy (Wan 2003). Thus, from the viewpoint of social welfare improvement, suitable regulation policies should be considered. Research linking smoking and gambling behaviors would help to provide policymakers with important information. The lack of such research, linking smoking and gambling, has led us to our current study.

Rational Addiction with an Optimal Inventory: Theory and Evidence from Japanese Daily and Monthly Purchases

There are two main issues when estimating demand or supply equations. One is that the price becomes endogenous because demand and supply are determined simultaneously. Therefore, it is very difficult to estimate the demand or supply equation using aggregate data. A natural experiment constitutes a good approach for solving this problem. For example, Angrist et al. (2000) use typhoons as an instrument for price in estimating fish demand. The second issue is that the price becomes endogenous because some unobserved factors become omitted variables in the error term and correlate with the price. For example, rational consumer behavior, like hoarding when faced with a price increase, is correlated with price.