Time preference and perceptions about government spending and tax: Smokers’ dependence on government support

Eiji Yamamura ()

MPRA Paper from University Library of Munich, Germany

Abstract: Previous studies show that smokers are likely to be more impatient and prefer immediate benefits compared with non-smokers. Thus, smokers are regarded as myopic people and therefore have a high time discount rate. Such a tendency is thought to be related not only to short-term benefits (as opposed to long-term benefits), but also free-riding behavior. Using individual data, this paper examines which types of government spending smokers with such characteristics prefer. The important findings are: (1) smokers consider the amount of government spending on social security and unemployment measures to be low and (2) smokers perceive their tax burden to be high. These findings imply that smokers tend to place greater importance on public expenditure that they will personally benefit from, but they are less willing to bear its cost. It is inferred from the estimation results that those who are myopic do not consider long-term benefits, which can result in a number of personal problems in the future, and they anticipate government expenditure will help them with such problems. That is, to enjoy the benefit of free riding, seemingly myopic people are more likely to prefer expenditure on social security and unemployment measures.

Keywords: smoker; government spending; perceived tax burden; free rider. (search for similar items in EconPapers)
JEL-codes: D31 H51 H55 (search for similar items in EconPapers)
Date: 2014-03-25
New Economics Papers: this item is included in nep-hea, nep-pbe and nep-pub
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