日本版総合的社会調査共同研究拠点 研究論文集[20] JGSS Research Series No.17

What Form Public Attitudes Toward Fiscal Consolidation?
Theory and Data Analysis Using JGSS-2012
Riko YUJI
College of Arts and Sciences, The University of Tokyo
財政再建に対する国民の態度形成の諸要因の解明―理論と JGSS-2012 を用いたデータ分析―
由地 莉子
東京大学教養学部

With its highest general government debt to GDP ratio among G7 countries, fiscal consolidation
has been a critical issue in Japan. However, in practice, the public have seemingly contradictory
attitudes, where people oppose some of the major fiscal consolidation measures despite being alarmed
at high government debts and deficits. This paper attempts to resolve this puzzle by modeling theformation of public attitudes toward fiscal consolidation measures based on ample prior research.
This model is partly tested by using Japanese General Social Surveys (JGSS)-2012. The empiricalanalysis shows that one’s economic situation and trust in politicians and the government appear to be
influential factors affecting the support for one of the major fiscal consolidation measures, valueadded tax (VAT) hike. Among the proxy variables relating to one’s economic situation, subjective
evaluation of one’s economic situation better explains one’s attitudes toward fiscal consolidation thanthe objective overview of one’s economic situation via quantitative data. This implies that paying
attention to subjective economic well-being as well as objective economic indicators can lead to better
policy making toward fiscal consolidation.
Key Words: Attitude, JGSSG7 諸国の中で最も高い政府債務残高（対 GDP 比）を抱える日本では、財政再建は重要な政策課題である。しかし、国民は政府債務残高や財政赤字の大きさに危機感を有するものの、いくつかの主要な財政再建の方策に反対するという、一見矛盾した態度を示している。本稿は財政再建の方策に対する国民の態度形成過程を、先行研究に基づいてモデル化することでこの矛盾の解明を目指した。また、JGSS-2012 を用いたデータ分析によりモデルの妥当性を検証した。データ分析により、財政再建の主要な方策の 1 つである消費増税に対する態度形成において、経済状況と政治家・政府への信頼が重要な要因であると示された。経済状況を示す代理変数の中では、客観的な経済指標よりも主観的な経済状況の評価の方が消費増税に対する態度形成に強い影響を与えていた。これは、財政再建の方策を考える上で客観的な経済指標だけでなく主観的な経済状況の評価にも注意を払う必要性を示唆している。

キーワード：消費税、意識、JGSS

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1. Introduction
1.1 History of Fiscal Consolidation in JapanThe Japanese general government gross debt has reached about 236% of its Gross Domestic
product (GDP) in 2018 (International Monetary Fund, 2020). This government debt to GDP ratio is thehighest among the G7 countries and fiscal consolidation has been one of the top priority issues inJapanese politics since the 1980s. However, prior research (Kato, 2003; Steinmo, 2017) has focused
primarily on macro-level institutional factors and paid little attention to micro-level; how citizens
understand government finances and form attitudes toward fiscal consolidation measures. They have
depicted the strong opposition to fiscal consolidation measures such as VAT hike, but has not questioned
why citizens respond in such manner. Therefore, this article aims to reveal how citizens become awareof, evaluate and respond to measures suggested for fiscal consolidation. This discussion is gaining
importance given the surge of public debt across the globe due to the COVID-19 pandemic. Although
there is emerging literature on Modern Monetary Theory (MMT) that disagrees with setting fiscal
consolidation as a policy target, it is assumed in this paper that fiscal consolidation is an important policy
target.
1.2 Puzzle
In understanding the mechanism of how citizens form attitudes toward fiscal consolidation
measures, it is meaningful to pay attention to a puzzle in public attitudes in Japan, which is while citizens
in Japan are alarmed at its government's high debts and deficits, there is persistent opposition to someof the major concrete measures for fiscal consolidation. Opinion polls indicate that the public has beenhighly concerned with government debts and deficits (Table 1). In all four opinion polls, those who are
relatively alarmed at the government finances account for more than 80% of the respondents.
Table 1. Concerns over Government Finances as Reflected in Opinion Polls

Sources: Constructed from Yomiuri Shimbun (1996), Asahi Shimbun (2008), The Mainichi (2011), Asahi Shimbun (2013)40

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On the other hand, there is a lack of support from the citizens toward concrete policy measures.
Attitudes toward the VAT hike, the main revenue raising measure for fiscal consolidation, well represent
the puzzle. Figure 1 shows the results of opinion polls conducted by Nikkei Inc. between 2014 and 2019,asking “Do you agree with raising the VAT rate to 10% as planned?” (Nikkei Inc., 2020). Excluding thelast two polls, those who disagree with the hike surpass those who support it. Given that the tax hike
was already politically agreed in 2012 and the public had it postponed twice, the persistent opposition
is conspicuous. Furthermore, proposals to raise the co-payment ratio of medical expenditure with anintention to reduce government social security expenditure, have also faced persistent opposition (Asahi
Shimbun, 1998; The Mainichi, 2003). On the other hand, optimization of medical care fees and drug
prices has generally been supported by the public (Asahi Shimbun, 2005; Yomiuri Shimbun, 1999).
These findings may imply that VAT hike and co-payment ratio increase face strong opposition since
they directly impose burdens on citizens while optimization of medical care fees and drug prices does
not directly impact citizens and instead increases burdens on specific interest groups, such as thepharmaceutical industry and medical associations.
(%)

Figure 1. Attitudes toward 10% of VAT.

Source: Constructed with the data from Nikkei Inc. (2020)

Therefore, this research limits its scope to the fiscal consolidation measures that directly require
the public to bear more burden and tackles why people oppose such measures despite being alarmed at
the high government debts. This paper is structured as the following three sections. Based on previous
research, Section 2 proposes a model on how citizens form their attitudes toward fiscal consolidation
measures that increase their burden. The following section tests the model against JGSS-2012. Section
4 will further discuss the results of the empirical analysis.

2. Modeling Public Attitudes toward Fiscal Consolidation Measures
2.1 Model Overview
Aiming to bridge the seemingly contradictory public attitudes, the model (Figure 2-4) is createdby the author based on the ample prior research mentioned in the subsection 2-2.

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Figure 2. Three Phases of Public Attitude Formation.

Figure 3. Process the Public Undergoes from the Awareness Phase to the Evaluation Phase.

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Figure 4. Process the Public Undergoes from the Evaluation Phase to the Action Phase.

As shown in Figure 2, there are three phases in the model: Awareness Phase, Evaluation Phase
and Action Phase. Initially, public attitudes hinge on whether people are aware of the high Japanese
government debts and deficits. Those who are aware are presumed to go through the Evaluation Phase.
At the Evaluation phase, people will diverge in how alarmed they feel about the government debts anddeficits. After evaluating the current debt situation, people who are highly or moderately alarmed willenter the Action Phase, where they decide whether to support or oppose fiscal consolidation measures.
Those who are not aware of the high debts and deficits and those who are aware of but not alarmed will
choose to oppose the fiscal consolidation measures as depicted in Figure 2.
The process from the Awareness Phase to the Evaluation Phase is illustrated in Figure 3. People
who are aware of the high debts will evaluate the current situation based on the debt/deficit frames they
are exposed to (Factor 1). Those who fit within the Budget Orthodox frame and the Rule of Thumbframe will be alarmed at the high government debts while those who fit within the Keynesian frame willtake the deficits as investment for economic growth and will not be concerned with it.
The process from the Evaluation Phase to the Action Phase is described in Figure 4. There are
five factors that determine whether those alarmed at the high government debts will support or oppose
the fiscal consolidation measures. The public will first consider how this fiscal risk will impact theirown life based on their beneficiary awareness (Factor 2). Those who feel they receive limited benefits
from the public welfare system will not be willing to contribute to fiscal consolidation since they think
the fiscal risk has limited impact on their lives. If they have high beneficiary awareness, they will bewilling to bear additional burdens to sustain the system and are seen to proceed to the next stage ofconsideration, the projection bias they have (Factor 3). People with a strong projection bias will assume
that the current stable debt servicing will continue and underestimate the existing fiscal risks. On theother hand, those with a weak projection bias will consider the possibility that the situation might gobeyond the government capacity and will be inclined to take precautionary action. The decision of these43

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precautious people will then be influenced by another factor - time preference (Factor 4). People withhigher time preference will prefer policies that will bring short-term benefits such as economic stimulus
packages to fiscal consolidation with long-term benefits. Those with low time preference are more likely
to support the long-term policies such as fiscal consolidation. However, this depends largely on theeconomic situation they are facing (Factor 5). People struggling to make ends meet tend to oppose fiscal
consolidation measures that require further burdens. Those who can afford the fiscal consolidation
measure will face the last factor, which is the level of trust they have in politicians and the government(Factor 6). Those who have a lack of trust in politicians and the government will be hesitant to bear
additional burdens as they cannot be sure that their contribution will be used properly for fiscal
consolidation. After progressing through all these five stages, people will then support the fiscal
consolidation measures. Those who are distracted in any of these stages will oppose the fiscal
consolidation measures.
The puzzle mentioned in the previous section is the discrepancy between the Evaluation Phaseand the Action Phase. Opinion polls show that at the Evaluation Phase, most people are highly ormoderately alarmed at the Japanese government debt. Despite this, other opinion polls imply that the
majority oppose fiscal consolidation measures like the co-payment ratio increase and the VAT hike in
the Action Phase. Although the model assumes that the flow is unidirectional from the Awareness Phaseto the Action Phase, it is possible for the flow to be in the reverse direction. However, in order to simplify
the model for empirical analysis, this paper will leave this aspect to future research.
2.2 Previous ResearchThis subsection will elaborate on the model above by highlighting the rich body of prior research.
2.2.1 The Awareness Phase
Hayo and Neumeier (2013) empirically showed that the better people know about debt-related
economic measures, the greater their support for immediate public debt reduction will be. This implies
that factual knowledge on the current public debt situation plays an important role in forming public
attitudes toward fiscal consolidation.
2.2.2 The Process from the Awareness Phase to the Evaluation Phase
Factor 1: Debt/Deficit Frames
Barnes and Hicks (2018) presented two media framings: Budget Orthodoxy frame and Keynesianframe. The former, often associated with European Central Bank, promotes deficit reduction byemphasizing the economic problems of other countries with large debts. The latter, endorsed byAmerican “saltwater” economists and recently the International Monetary Fund (IMF), holds Keynesian
perspectives on growth and regards deficit spending as an investment for the economy. Using the casestudy of the UK in the 2010s, they showed that the individual attitudes toward deficit reduction is
influenced by the frames held by the newspaper one reads.
Another frame we focus on here is the Rule of Thumb frame. Stanley (2014) showed that people
rely on the rule of thumb used in everyday life to evaluate public debts and deficits. Unpacking the “ageof austerity (2008-2012)”, his focus group interviews revealed how the middle-class rule of thumb drove
people to support radical spending cuts as follows. After experiencing the global financial crisis and theresulting credit crunch, people became cautious of the financialization of their everyday life and began
to understand the culturally salient rule of thumb - one lives within one’s means and one pays back one’s
debts. This change in their mindset resonated with the Conservative criticism against the Labour44

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government as a profligate state relying on public debts, leading to support for large spending cuts. His
findings show that the association of government finances with that of households played a significant
role in determining public attitudes toward public debts.
2.2.3 The Process from the Evaluation Phase to the Action Phase
Factor 2: Beneficiary AwarenessThe scholarship on universal welfare systems emphasizes the importance of beneficiaryawareness in forming support for the welfare system. Beneficiary awareness, as used here, consists of
the amount of benefits and the procedure.
Ide (2013) emphasizes the importance of the amount of benefits in the nominal term not therelative term to the cost. He points out that Japan’s highly reported pain from tax payment can be traced
back to the lack of beneficiary awareness due to low nominal benefits. While the net burden rate is thesame in both Japan and most of the Nordic countries, small benefits in exchange for low taxes leavepeople unsatisfactory and pained from tax payments in Japan (ibid.).
Rothstein (2001) emphasizes the importance of procedural justice. He claims that one of theconditions where people support welfare system is that they can be assured of receiving the benefits ofsocial programs “in a fair and impartial way” as promised. Compared to the selective welfare system
faced with the difficulty of distinguishing “the needy”, the universal system covers the entire populationand is likely to deliver benefits without arbitrary selection (ibid.).
These findings imply that when one receives greater nominal benefits with procedural justice,
one is likely to support the system despite high costs. Although support for the system may not directly
entail support for fiscal consolidation measures, beneficiary awareness should be regarded as essential.
Factor 3: Projection Bias
According to Loewenstein, O'Donoghue and Rabin (2003), projection bias is the tendency tounderappreciate the effects of changes in their states, and hence falsely project their current preferences
over consumption onto their future preferences. This psychological bias has mostly been tested inconsumption behavior and has been paid little attention in public policy. However, the idea is applicable
to arguments on fiscal consolidation. In the context of fiscal consolidation, we can assume that thepredicted future utility of debt spending is overly influenced by the current state, in which debt is stably
managed with low interest rates. This implies that projection bias will cause people to underestimate theeffects of possible changes in the environment surrounding the debt spending. The future state might
consist of situations such as declining trust in Japanese bonds and higher interest rates leading to higher
debt management costs, to make matters worse, Japan might end up in a sovereign debt crisis. Thosewith a strong projection bias may have an optimistic view that the government can continue to manage
public debts with low interest rates and may be less willing to take additional burdens for fiscal
consolidation.
Factor 4: Time PreferenceTime preference is “the preference for immediate utility over delayed utility” (Frederick,Loewenstein, and O’Donoghue, 2002, p.352). Hayo and Neumeier (2013) measured respondents’ quasihyperbolic discount function and empirically tested if quasi-hyperbolic discount function influences the
support for fiscal consolidation. Quasi-hyperbolic discounting assumes that people are more impatientin the short-run; hence higher time preference in the near future while lower time preference in the
distant future (ibid.). Their experiments show that lower discount rate itself and greater short-run

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patience leads to a significantly higher likelihood of supporting fiscal consolidation. Therefore, time
preference can be regarded as one potential factor affecting support for fiscal consolidation measures.
Factor 5: Economic Situation
It is consistent with our instincts that people will oppose paying more taxes or medical
expenditure when they are struggling to make their own living. Hayo and Neumeier (2013) measured
one’s economic situation by three objective indicators (net monthly household income, the household’s
real assets, a social class indicator) and one subjective indicator (subjective assessment of one’s
economic situation rating from 1 to 5). Among the four indicators, subjective assessment and real assets
showed a statistically significant impact on support for immediate public debt reduction while householdincome and social class indicators had no significant impact (ibid.). Thus, it can be understood that atleast some aspects of the economic situation influence attitudes toward fiscal consolidation measures.
Factor 6: Trust in Politicians and the Government
Jacobs and Matthews (2012) theorized that the uncertainty deriving from the nature of politics,
which is “the possibility that politicians tomorrow will fail to deliver on the promises made today” (ibid.,
p.926), can reduce support for policies with long-term benefits. They asked respondents if they support
the policy brief proposing an immediate tax increase and benefit cut in the US Social Security System toaccumulate resources that would sustain the system, which would otherwise run deficit in the future due todemographic changes. They manipulated the expected timing of the financial crisis to come; five years laterand forty years later. They also measured political trust by three components. The combined index forpolitical trust turned negatively correlated with the timing manipulations of five years later and forty
years later, which implies that greater levels of trust dampens the differences between the short-termand long-term benefits. Their findings show that political trust is influential in forming attitudes toward
a long-term policy investment such as fiscal consolidation.
To sum up the model, the puzzle presented above can be explained as the five factors in theprocess from the Evaluation Phase to the Action Phase which discourage those who are alarmed atgovernment debts from supporting fiscal consolidation measures.

3. Empirical Analysis of the ModelIn this section, the model presented above will be empirically tested using JGSS-2012. The
dependent variable in this test is the attitudes toward the VAT hike and does not include attitudes toward
other fiscal consolidation measures. This is because VAT has been a hot political agenda with rich dataon opinion polls regarding public attitudes readily available while other measures have limited data
available. Furthermore, given its strong revenue raising power, Kato (2003) emphasizes the importanceof VAT in financing the welfare state. Thus, the study of the determinants of attitudes toward the VAT
hike has significant influence on fiscal consolidation. It is technically possible for the public to oppose
the VAT hike if they prefer other measures for fiscal consolidation. However, due to the data limitation,
the exploration of this possibility will be left for further research.
This analysis is limited to find the correlations between the factors and the attitudes toward the
VAT hike. Furthermore, some of the factors in the model cannot be tested as the dataset do not include
appropriate proxy variables. However, this rich empirical data shows whether some of the factors havepositive or negative correlations with attitudes toward the VAT hike, and if so, the degree of its impact.
Correlations are measured by multiple regression analysis. JGSS-2012 is conducted partly with face-to-46

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face interviews and partly as a self-administered questionnaire. The latter has two versions: A and B.
This article analyzes the 4500 samples assigned to the version A self-administered questionnaire with
2332 valid responses.
3.1 Operationalization of Variables
The dependent variable, attitudes toward the VAT hike, is represented by the answer to Q51 of
the self-administered questionnaire A, asking what one thinks of the appropriate rate of consumptiontax (VAT). Although the range of the six choices are not equal, the choices well represent one’s attitudes
toward VAT: opposition toward the VAT rate at that time (5%), support for the VAT rate at that time(5%), support for higher VAT rates. Thus, the question can be a measurement of one’s attitudes toward
the VAT hike, a measure for fiscal consolidation. Although the VAT hike has been suggested inassociation with fiscal consolidation, there is a possibility that some respondents are not aware of thiscontext and do not regard it as a measure for fiscal consolidation. However, given the data limitations,
it is assumed that respondents regard higher VAT rates as a fiscal consolidation measure.
Among the five factors in work from the Evaluation Phase to the Action Phase, economic
situation (Factor 5) and trust in politicians and the government (Factor 6) can be tested using JGSS2012. Economic situation (Factor 5) has three variables: the answer to Q46_1 of face-to-face interview
and the answers to Q28 and Q34 of self-administered questionnaire A. Q46_1 measures one’s objective
economic situation by asking about their annual household income. Q28 measures the subjective
assessment of one’s relative household income among Japanese families. Q34 represents the subjective
prediction of one’s future economic situation in the future. The proxy variable of trust in politicians andthe government (Factor 6) consists of the answers to Q66_D and Q66_K from the self-administeredquestionnaire A. When analyzed together, these two questions can reveal the trust one has in politicians
and the government. Table 2 gives a more detailed overview of the proxy variables. Furthermore, control
variables describing the demography of the respondents - gender, age and education - are included.

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Table 2. The Operationalization of Variables in JGSS-2012
Dependent Variable

Proxy Variable

Details of Proxy variable

Attitudes toward theWhat do you think is the appropriate rate for consumption tax? (OPCNSMTX)VAT hike (Attitudes
Answer to Q51 of selftoward Fiscal
administered questionnaire A(1) 0%, (2) 1-4%, (3) 5% (current VAT rate), (4) 6-9%, (5)10-14%, (6)15% or more
Consolidation Measures)
Independent Variables Proxy Variables

Details of Proxy variables
Which one of the following best describes your annual household income last year?
Please answer the income before deducting taxes. Include income not only from yourjobs, but also from all other sources such as stock shares, pensions, and real estate.
(SZHSINCM)

Economic Situation(Objective/Current)(Factor 5)

Answer to Q46_1 of face-toface interview(1) 0 yen - 2.5 million yen(2) 2.5 million yen - 4.5 million yen(3) 4.5 million yen - 6.5 million yen(4) 6.5 million yen - 8.5 million yen(5) 8.5 million yen - 10 million yen(6) 10 million yen - 12 million yen(7) 12 million yen - 14 million yen(8) 14 million yen - 16 million yen(9) 16 million yen - 18.5 million yen(10) 18.5 million yen or overIn comparison to most Japanese families in general, how would you rate your family's
economic situation? (OP5FFINX)

Economic Situation(Subjective/Current)(Factor 5)

Answer to Q28 of selfadministered questionnaire A

Economic Situation(Subjective/Future)(Factor 5)

Do you feel anxious about your economic situation in the future?(AXECNSF)
Answer to Q34 of selfadministered questionnaire A 1.I feel very anxious, 2.I feel somewhat anxious, 3.I have mixed feelings, 4. I don’t feelanxious very much, 5.I don’t feel anxious at all

Trust in Politicians andthe Government(Factor 6)

1.Far below average, 2.Below average, 3.Average, 4.Above average, 5.Far above
average

How much do you trust the following people? (TR3BCRAZ, TR3CGMNZ)
Average answer to Q66_D and D: Bureaucrats of Central Government
Q66_K of self-administered
K: Congressman
questionnaire A
1.A great deal, 2.To some extent, 3.Not at all, 4. Don’t know

Control variables

Proxy Variables

GenderAnswer to SEXA of face sheet(SEXA) 0.Male 1.Femaleof face-to-face ineterview

Age

Answer to AGEB of face sheet(AGEB) in real numberof face-to-face ineterview

Details of Proxy variables

What is the last school you attended (or are attending now)? Consider dropout as"graduated" (XXLSTSCH)

Education

1.Elementary school and its equivalence (Ordinary elementary school in the old system,
including national elementary school)
2.Junior high school and its equivalence (Higher elementary school in the old system)
Answer to Q53 of face-to-face 3.High school and its equivalence (Junior high school/ Girls' high school in the oldinterview
system)4.College of technology and its equivalence (Vocational school/ Commerce school in
the old system)
5.2-year college and its equivalence (Normal school in the old system, Higher school or
vocational school in the old system/ higher normal school)
6.University (University/ Grauate school in the old system)
7.Graduate school

Note: Re-coding is done for Q46_1 and Q53 of face-to-face interviews, and Q66_D and Q66_K of the selfadministered questionnaire A(1) .Gender is given dummy variables.

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3.2 Results
Multiple regression analysis examines the correlations between the dependent variable and the
independent variables. Although most of the proxy variables here are ordinal scales and not ratio scales
appropriate for multiple regression analysis, we can use the ordinal scales as an alternative. Gender andeducation, which are categorical variables, are coded with dummy variables. The only ratio scale data,
which is age, is analyzed in the original form.
The proxy variables for economic situation (objective/current) and trust in politicians and thegovernment in JGSS-2012 have many missing values and listwise deletion of cases will significantly
reduce the sample size. Therefore, in this case, the missing cases are given the average value of the valid
answers. This treatment is conducted for “No answer” response of all variables tested, “Don’t know”
response of economic situation (objective/current), trust in politicians and the government and education,
as well as “Don’t want to state the income” response to their economic situation (objective/current).
Table 3 gives a summary of all variables and Table 4 is the correlation matrix of independent
variables. The multicollinearity test is negative for all pairs of the independent variables since the VIFs
calculated from the coefficients in Table 4 are less than 10.
Table 3. Summary of Variables in JGSS-2012

Note: The statistics above are calculated after the treatment to substitute missing values with average values.
Table 4. Correlation Matrix of Independent Variables in JGSS-2012
Economic Situation Economic Situation(Objective/Current) (Subjective/Current)

Economic Situation(Subjective/Future)

Trust in Politicians
and the Government

GenderEconomic Situation(Subjective/Current)(Factor 5)

0.456

Economic Situation(Subjective/Future)(Factor 5)

0.136

0.372

Trust in Politicians
and the Government(Factor 6)

0.034

0.086

0.142

Gender

-0.067-0.012-0.0120.054

Age-0.129-0.094

0.117

0.121

-0.001

Education

0.242

0.256

0.082

-0.013-0.129Note: The numbers in this table are rounded off to three decimal places.

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Age

-0.405

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Table 5 shows the results of the multiple regression analysis. Correlations are statisticallysignificant for all the independent variables at 1% level except for trust in politicians and the government
at 5% level. Coefficients appear to support the model in general. Those who have a higher householdincome tend to support the VAT hike. As one subjectively feels relatively better off among Japanesefamilies and has less economic anxiety in the future, one is more likely to support raising the VAT rate.
Those who have greater trust in politicians and the government are generally more supportive of the
VAT hike. As for demographic factors, men support the VAT hike more than women in general. Older
citizens and those with higher education tend to have more support for the VAT hike. Based on Rsquared, the fit of the regression model is about 7%. Listwise deletion pattern yields similar results
where R-squared is about 8%, and the positive and negative direction of all the coefficients are the same
while significance levels differ for some variables.(2) Economic situation (subjective/current) is the mostimpactful factor, followed by economic situation (subjective/future), economic situation(objective/current), and trust in politicians and the government in order.
Table 5. Determinants of the Attitudes toward the VAT hike in JGSS-2012
Independent VariablesβStd. Error (β)

Economic Situation(Objective / Current) (Factor 5)

0.065***

0.023

Economic Situation(Subjective / Current) (Factor 5)

0.082***

0.024

Economic Situation(Subjective / Future) (Factor 5)

0.076***

0.022

Trust in Politicians and the Government (Factor 6)

0.040**

0.020

Gender

-0.120***

0.020

Age

0.108***

0.021

Education

0.121***

0.023

Observations2332

R-squared

0.076

Note: *, **, and *** denote significance at 10, 5, 1% level respectively. Tests are run with Excel 16.16. 27. Dueto the technical limitation in analyzing with Excel 16.16. 27, standardization contains errors of the constantdeviating from zero by about 0.003.

In order to precisely figure out what factors caused the puzzle, it is necessary to carry out multiple
regression analysis, limiting samples to those who are highly or moderately alarmed at government debts,
which we will leave for future research.

3. Discussion
Among the empirical findings, those relating to one’s economic situation have significant
implications. The subjective assessment of one’s relative household income among Japanese families
appeared the most impactful, followed by the subjective prediction of one’s future economic situation
and annual household income in order. This implies that the subjective evaluation of one’s economic
situation better explains one’s attitudes toward VAT hike than the objective overview of one’s economic

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situation via quantitative data. Furthermore, the objective overview of one’s economic situation and thesubjective evaluation of economic situation do not align well, with the correlation between annual
household income and subjective assessment of one’s relative household income among Japanesefamilies at around 0.4 and between annual household income and the subjective prediction of one’s
future economic situation in the future at about 0.1.
Prior research also agrees that there is no perfect correspondence between objective and subjective
measures of one’s economic situation (Santarelli, 2013; Hayo and Seifer, 2003). This gap is importantin policy making as policy interventions might fail in improving subjective economic situations despite
improving objective economic indicators (Santarelli, 2013). Therefore, when the government aims toform support for VAT hike, they need to consider the subjective evaluation of one’s economic situation
as well as objective indicators. Furthermore, since objective and subjective economic measures do not
perfectly align, there is a possibility to improve subjective assessment of one’s economic situation
without increasing the quantitative amount of economic welfare such as income. However, it isnecessary to make sure that such policy intervention in the subjective field does not result in information
manipulation, and objective welfare improvement should also be a policy target.
There are some important aspects that this paper leaves for future research. Exploring thedeterminants of public attitudes toward raising co-payment ratio of medical expenditure, another fiscal
consolidation measure that impose direct burdens on citizens, may provide further implications. In
addition, empirical analysis including debt/deficit frame, beneficiary awareness, projection bias andtime preference will lead to better understanding on the public attitude formation.
[Acknowledgement]
JGSS 2012 is designed and carried out by the JGSS Research Center at Osaka University ofCommerce (Joint Usage / Research Center for Japanese General Social Surveys accredited by Ministerof Education, Culture, Sports, Science and Technology), in collaboration with the Institute of Social
Science at The University of Tokyo. The project is financially assisted by the Japanese Ministry of
Education, Culture, Sports, Science and Technology and Osaka University of Commerce. Data isretrieved from the Center for Social Research and Data Archives, Institute of Social Science, theUniversity of Tokyo.
Throughout the writing of this paper, I have received a great deal of support and assistance.
First and foremost, this paper would not have been possible without the exceptional support of
my supervisor, Professor Yu Uchiyama, whose expertise and advice were invaluable. I would also liketo show gratitude to Project Assistant Professor Masako Tanaka for all her help, support and unfailing
patience in answering numerous questions about data analysis. I would also like to thank Lee Kah Hui
who has offered incredible support in reviewing this paper. Finally, I would like to express myappreciation to Taichi Yaguchi for being the great source of inspiration and support during the courseof writing this paper.
[Notes](1) In Q46_1 of face-to-face interview, the range of answer choice is significantly different between
lower income layers and higher income layers. Thus, re-coding aims to limit the range to between 1.5
million and 2.5 million yen. Q66_D and Q66_K of self-administered questionnaire A are changed fromdescending order to ascending order: from (1.A great deal - 3.Not at all) to (1.Not at all - 3.A greatdeal). Q53 of face-to-face interview is re-coded to combine old and current school systems.
(2) The significance level of economic situation (objective/current) at 5%, economic situation

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日本版総合的社会調査共同研究拠点 研究論文集[20] JGSS Research Series No.17(subjective/current) at 10%, economic situation (objective/future) at 5%, and trust in politicians and thegovernment at 10%. The significance levels for other variables are the same.
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