Consequences of the Chinese Chopstick Tax

May 17, 2006

In a classic use of a “Pigouvian” tax, the Chinese government has slapped a 5 percent excise tax on disposable wooden chopsticks supposedly aimed at slowing deforestation in the Chinese countryside. From Yahoo News:

Walk into any Japanese noodle shop or restaurant and chances are you’ll be eating with a pair of disposable wooden chopsticks from China — but not for long. In a move that has cheered environmentalists but worried restaurant owners, China has slapped a 5 percent tax on the chopsticks over concerns of deforestation.

The move is hitting hard at the Japanese, who consume a tremendous 25 billion sets of wooden chopsticks a year — about 200 pairs per person. Some 97 percent of them come from China.

Chinese chopstick exporters have responded to the tax increase and a rise in other costs by slapping a 30 percent hike on chopstick prices — with a planned additional 20 percent increase pending.

The price hike has sent Japanese restaurants scrambling to find alternative sources for chopsticks, called “waribashi” in Japanese.

“We’re not in an emergency situation yet, but there has been some impact,” said Ichiro Fukuoka, director of Japan Chopsticks Import Association. (Read the full story here.)

Since taxes affect relative prices, which in turn affect the costs and benefits of different cultural habits, there may be an unexpected consequence: the rise of the western-style fork.

If that sounds implausible, recall the well-documented cultural impact of the 18th Century British window tax—i.e., narrow house fronts and bricked-up windows that characterize classic British architecture to this day.

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