Smoking is considered as the major preventable cause of mortality. Turning into 21 century, smoking reduction policies has been promoted further by Japanese government and the prevalence rates of smoking in Japan have been decreased significantly. However, the average smoking rate is still about 20%. This paper would like to analyze the smoking behavior from three points of view according to the behavioral economics, which are rate of time preference (impatience), hyperbolic discounting, and decision maker’s naivety, and then try to propose polices for smoking reduction.
The rational addiction model for tobacco consumption analysis assumes that smokers’ consumer behaviors are forward-looking and time consistent. However, the phenomenon that many smokers want to quit smoking but fail to execute their smoking cessation plan implies that smokers’ decision making are time inconsistent, and it can be explained by the present bias of hyperbolic discounting. Hyperbolic discounting causes preference reversal, and leads the decision maker to be conflict between his or her present self and future self and face the self-control problem. For sophisticated smokers, they recognize their time inconsistency and use self-control devices or commitments to avert their time-inconsistent tendencies. However, for the naïve or partly naïve smokers, they are optimistic about their self-control problem and need external interventions to lead them to make proper decision and maximize their well-being.
The Japanese government has set the goal to reduce the smoking rate to 12% before 2022. Through literature review and data analysis, this paper would like to propose that in order to reduce tobacco smoking, tobacco tax increasing and smoking license system have to be considered in the smoking regulating policy. For the hyperbolic discounting sophisticated smokers, higher tobacco tax will be an effective external commitment to increase their intentions to quit smoking, and on the other hand, for the naïve or partly naïve smokers, smoking license will nudge them to quit smoking.