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The purpose of this paper is to show how the taxation effect on cross-state smuggling can be a valid instrumental variable for lagged and future consumption together with the local price series.

On the same grounds, the authors raise the question using the rational-addiction model by noticing that the neighboring price differentials really capture the possible smuggling or bootlegging effects.

Moreover, the authors look into the extended model to test the key condition that the expected future financial consequences will affect the current consumptions.

This supports the rational-addiction model, which can be used to plan the taxation for the forward-looking consumptions.

The purpose of this paper is to apply the Becker‐Murphy theory of rational addiction to the case of carbonated soft drinks. The research aims to reveal the rational addiction evidence of carbonated soft drinks and derive policy implications under this evidence. Consumers' rational addictive evidence for carbonated soft drinks provides a warning for the Chinese government to regulate the industry, due to its bad health consequences.

The authors empirically apply a time‐varying parameter model and scanner data set from 46 US cities.

Empirical results provide strong evidence that carbonated soft drinks are rationally addictive, thus opening the door to taxation and regulation. Taking rational addition into account, estimated demand elasticities are much lower than previous estimates using scanner data, which implies a limited role for taxes to curb consumption but a strong role to raise revenue to fund health promotion programs.

This is the first study to test the rational addiction nature of carbonated soft drinks, thus adding to the scarce economic literature on food addiction. Although the empirical results derived are based on soft drink consumption in the USA, China is experiencing a similar consumption increase in carbonated soft drinks as in the USA, in the examined period. Therefore, the lessons from the USA are also valuable for the public policy makers in China.

It is argued that addicts, as people in general, are forward-looking and that they try to make the best of what they have got. However, this does not imply that they are fully rational. Cognitive defects, instabilities in preferences, and irrationalities in the form of wishful thinking and dynamical inconsistency play an important role in addictive behaviours. These “imperfections” in people's rationality may not have very large consequences in the case of ordinary goods, but their effect can be dramatic in relation to addictive goods. In the first part of the paper, the rational addiction theory and the empirical evidence that have been presented in support of the theory is reviewed. Regarding the conventional tests of the theory by econometric methods, it is argued that the tests are misguided, both theoretically and methodologically. Furthermore, it is claimed that the definition of addiction implicit in the rational addiction theory is unrealistic, and that the theory makes unrealistic assumptions about human nature. Some empirical evidence for these claims is reviewed. It is concluded that although the theory has its virtues, it faces serious problems and must be rejected in its original form. Secondly, the socio-cultural embeddedness of addictive behaviours, and the social roots of individual preferences, are discussed. These issues are more or less ignored in rational addiction theory. It is argued that we cannot expect to obtain a proper understanding of many addictive phenomena, unless they are seen in their proper socio-cultural context.

A number of papers have empirically investigated the demand for cinema by applying the rational addiction model proposed by Becker and Murphy (1988). However, they fail to take account of the relationship between movie and television consumption. The purpose of this paper is to extend previous works on cinema demand by including both cinema and television movie consumption. To this aim a panel-data generalized method of moments (GMM) methodology is used to estimate a dynamic model of double rational addiction as proposed by Bask and Melkersson (2004) using a sample of monthly time- and cross-sectional series covering the 20 Italian regions over the period 2000–2002.

The purpose of this paper is to present a review of the literature on alcohol consumption, the externality cost of alcohol consumption, and the effectiveness of policy options.

Evidence on the cost to society of alcohol consumption, the amount of excise tax collected, the demand response of consumers, and the effectiveness of alcohol‐control policies is reviewed.

Alcohol excise taxes generally, but not everywhere, fail to recover the externality costs placed on society that arise from alcohol consumption. Where externality costs are greater than excise revenue higher excise taxes are one effective and appropriate policy response. Complementary policies to higher excise taxes are likely to include: the provision of more information about harmful effects to consumers, especially the young; greater enforcement of drunk‐driving laws and zero tolerance drunk‐driving laws for young drivers. Restrictions on the opening hours of late night venues may have a modest impact on reducing costs, while advertising restrictions are unlikely to be effective.

Typically. articles on alcohol consider a single issue. This review paper brings together information from both the health stream of alcohol studies and the economics stream of alcohol studies and provides a useful survey and synthesis of the literature.

The increased usage of smartphones has made mobile payment services (MPS) popular among millennials, but it is uncertain if this shift in behavior is temporary due to situational factors like the pandemic or a long-term trend due to technological advances. This study uses the diffusion of innovation (DOI) literature to assess an integrated model including smartphone addiction, technology-related and consumer-related factors that influence consumers' intention to use MPS. It also explores the interplay of situational variables and smartphone addiction in shaping this relationship.

The authors base the conceptual model on the theory of rational addiction and the theory of optimal flow. This model is then empirically validated through data collected from seven hundred users of MPS in India. Research hypotheses are tested using structural equation modeling and multi-group analysis.

The study finds that smartphone addiction has a positive impact on millennials' perceived advantages, compatibility, trialability and observability of MPS but does not significantly affect their perceived complexity or risk. The results also suggest that the relationship between smartphone addiction and MPS is moderated by situational factors. In low-priority situations, smartphone addiction strengthens millennials' perceptions and intentions to use MPS, while in high-priority situations, situational factors overshadow the impact of smartphone addiction.

The findings of the study enable organizations to capitalize on smartphone addiction-driven MPS adoption behavior to sustain long-term usage behavior by appropriately understanding the context/situation which drives MPS adoption.

The U.S. 2009 Tobacco Control Act opened the door for new antismoking policies by giving the Food and Drug Administration broad regulatory authority over the tobacco industry. We develop a behavioral welfare economics approach to conduct cost-benefit analysis of FDA tobacco regulations. We use a simple two-period model to develop expressions for the impact of tobacco control policies on social welfare. Our model includes: nudge and paternalistic regulations; an excise tax on cigarettes; internalities created by period 1 versus period 2 consumption; and externalities from cigarette consumption. Our analytical expressions show that in the presence of uncorrected internalities and externalities, a nudge or a tax to reduce cigarette consumption improves social welfare. In sharp contrast, a paternalistic regulation might either improve or worsen social welfare. Another important result is that the social welfare gains from new policies do not only depend on the size of the internalities and externalities, but also depend on the extent to which current policies already correct the problems. We link our analytical expressions to the graphical approach used in most previous studies and discuss the information needed to complete cost-benefit analysis of tobacco regulations. We use our model as a framework to reexamine the evidence base for strong conclusions about the size of the internalities, which is the key information needed.

I discuss economic approaches to the demand for harmfully addictive substances with an emphasis on the role of money prices. First, I examine trends in the real prices and in the prevalence of the use of cigarettes, alcohol, cocaine, heroin, and marijuana in the U.S.A. Then I present estimates of time-series demand functions. Next, I discuss how economists have modified their traditional model of consumer behaviour to incorporate the addictive aspects of illegal substances. I conclude with implications for tax policy and for the lively and contentious debate concerning the legalization of marijuana, cocaine, and heroin.

Emergent research suggests that compulsive social media usage (CSMU) has a correlational link with well-being. Previous research in this area primarily focused on the prevalence, dynamics and consequences of social media usage. However, the knowledge of these occurrences among school and university students is still in its infancy stage. This research study addresses the knowledge gap by investigating the nexus between fear of missing out (FOMO), phubbing, CSMU and well-being.

Cross-sectional surveys were conducted for collecting the data of school students and university students during COVID-19 when the exposure to the Internet and social media among the students had increased tremendously. Multivariate analysis and Moderated Mediated analysis techniques were performed to analyze the data using the structural equation modeling approach.

The results indicated that while on one side, students experience “FOMO”, on the other, they phone snub the individuals available to them to interact. FOMO significantly influences well-being; phubbing also has a significant impact on well-being; phubbing partially mediates the relationship between CSMU and well-being. However, for university students, the full mediation of phubbing in the relationship between CSMU and well-being was confirmed. It was also found that sleep fully mediated the relationship between CSMU and well-being.

This study provides novel highlights of the differential effects of FOMO, phubbing, sleep hygiene and well-being among the university and school-attending cohorts.