progress report have to make by choosing any topic
Charith Imalka Wijemanna Student ID: 13491405 1 ADVANCED APPLIED MANAGEMENT (MGT737) PROGESS REPORT – 01 SEMESTER TWO 2018 Consumer Response Towards Tax Increase of Cigarettes: With reference to Sri Lanka and New Zealand Consumer Behavior Charith Imalka Wijemanna Student ID: 13491405 Supervisor: John Gallacher Charith Imalka Wijemanna Student ID: 13491405 2 Contents Introduction ................................................................................................................................. 2 Section One: Secondary Research .............................................................................................. 3 Section Two: Primary Research .................................................................................................. 5 Section Three: Emphasis Changes .............................................................................................. 5 Section Four: Other Information ................................................................................................. 6 Section Five: Coming Weeks’ Plan (6th August 2018 – 22nd September 2018) ....................... 6 Section Six: Actual to Plan Thus Far (31st July 2018 – 5th August 2018) ................................. 7 Bibliography ................................................................................................................................ 8 Introduction While thinking about a topic to be done as my research, I thought about various consumer products and how the taxes affect people’s day to-day lives, as each and everything that we pay for is taxed. As cigarettes are not necessity goods, I finalized to research on how consumers react to the increase in the taxes of cigarettes, of Sri Lanka and New Zealand. Furthermore, an increase in tax on cigarette may results two impacts. 1. Social Impact 2. Economic Impact Charith Imalka Wijemanna Student ID: 13491405 3 Section One: Secondary Research Following is the secondary research reviewed and for the period of 3rd July to 5th July. (Micaela H. Coady, 2013 June) In this research, the relationship between the excise tax increases and tax avoidant purchasing behaviors have been examined by this group of researchers by selecting New York City adult smokers as their target group. New York’s Annual Community Health Survey, has analyzed the data to evaluate the tax avoidance between 2003 to 2010 and also the smokers’ responses to the cigarette tax increase in 2008. The shown result was, after the tax increase in 2002, the percentage of smokers applying tax avoidance decreased from 30% to 13% from 2003 to 2007. After the tax increase in 2008, 21% of smokers had intended to buy more cigarettes through black-market rather than buying from a shop. This article’s conclusion was that to maximize the public health impact, cigarette tax increases should be combined with efforts to limit the flow of untaxed cigarettes to countries with high cigarette packet prices. This journal article would benefit for my research as it has highlighted the consumer responses to cigarette excise tax changes. (Lesley Chiou, 2010 June) In this article two researches from the Occidental College and the Harvard Kennedy school had conducted a research based on consumer response to cigarette excise tax changes in Chicago metropolitan area. They have scanned the data of cigarette sales from Dominick’s Finer Foods, Chicago. These researches have gathered information on excises taxes imposed by the government to neighboring states and Illinois. In this research they have applied two empirical approaches to highlight the areas of how the consumers adapt to tax changes. The result of this research is that, consumers have switched between more and less expensive cigarettes and have crossed country borders to purchase cigarettes. This report would be benefit to my research as it has highlighted the consumer response to cigarette excise tax changes. Charith Imalka Wijemanna Student ID: 13491405 4 (Dr George Thomson, 2007 November) In this article a Health Economist and a researcher had produced a report on Tobacco Taxation in New Zealand. The purpose of the report as per the authors are to assess the use of tobacco taxation to improve the health of New Zealanders. Also, another purpose of the report is making the policy recommendations on tobacco taxation in New Zealand. From the information they collected, they found out that New Zealand’s 750,00 smokers approximate average amount spent is $2135 each per year, from which $1500 is government tax revenue. Hence the consumption of cigarettes has dropped substantially during the past few decades. However, they have investigated that other factors than price such as changes in social attitudes to smoking, smoke free legislation etc. have also contributed to the fall in the consumption and increasing the tax rates are not the only instrument for tobacco control. This report also would be benefit to my research as it has highlighted the consumer response to cigarette excise tax changes. (Nolan, 2017) This article the researcher had looked at the responsiveness of cigarette tax. Government motivate cigarettes taxes to raise money for the state and at the same time there is another motive to discourage smoking habit. The researcher had focused on the tax revenue before and after the state’s tax increase and compared them to a state that had a similar level of tax revenue before the tax increment. This had exposed that the effectivity of the state tax revenue increment and at the same time that permitted to calculate the cigarette consumption. As a result, the researcher had proven that higher the revenue become increased of the state it decreases the number of packs sold in the state. Furthermore, they found that, from the decrease of the packs sold cannot be considered as a decrease in consumption. Tax increases are effective at increasing revenue, but it doesn’t directly say that they are effective at reducing consumption. This research article will contribute to my research project as it shows the taxation and consumer behavior. Charith Imalka Wijemanna Student ID: 13491405 5 Section Two: Primary Research For the primary research I’m going to take a sample of 100 which is 50 from Sr Lanka and 50 from New Zealand. For the primary data collection, I will use both quantitative and qualitative data for the research and these data will be used to answer the research question. In New Zealand I’m targeting the groups of cigarette smokers because it will ease to do findings. Primary research will not be conducted until NMIT’s ethics committee have given approval to this project. Further, I will create a questionnaire by using the Google Docs and collect the data via social medias to collect data from Sri Lanka. I have chosen the questionnaires because it is a good method of collecting data. As I have worked as a brand ambassador for the Ceylon Tobacco Company, Sri Lanka I have conducted a survey for the company based on how the customers react to the new products and the products which had relaunch to the market. For an instance, Benson and Hedges relaunched to the market