The Effects of the tobacco tax increase on public health

Abstract

Korean government implemented a huge increase in tax on tobacco nationwide in 2015. Previous literature proved approximately 4% of smokers quit smoking because of about 114% of the increased price. Many other researchers who interested in public health studied about the relationship between smoking and health status. This study attempts to identify the empirical analysis of the tax effect on public health combining the previous ideas, which the adjusted smoking behavior by tax implementation improves public health. To estimates, this study utilizes KOWEPS raw data and difference-in-differences methods. As a result, this study suggests the potential possibility of the improvement of mental health. However, there are insignificant results and some limitations such as time limits of the data, thus, still there remains veiled scope for further research on this topic.