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Cigarette smoking in Indonesia: examination of a myopic model of addictive behaviour

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  • Hidayat, Budi
  • Thabrany, Hasbullah

Abstract

Using aggregated panel data taken from three waves of the Indonesian Family Life Survey (1993–2000), this article tests the myopic addiction behaviour of cigarette demand. Sensitivity analysis is done by examining a rational addiction behavior of cigarette demand. The results provide support for myopic addiction. The short- and long-run price elasticities of cigarette demand are estimated at −0.28 and −0.73 respectively. Excise taxes are more likely to act as an effective tobacco control in the long-run rather than a major source of government revenue.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30194.

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Date of creation: 22 Mar 2010
Date of revision: 17 May 2010
Publication status: Published in International Journal of Environmental Research and Public Health 6.7(2010): pp. 2473-2485
Handle: RePEc:pra:mprapa:30194

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Keywords: cigarette consumption; myopic addictive models; methodology for panel data; Indonesia;

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  1. Baltagi, Badi H & Levin, Dan, 1986. "Estimating Dynamic Demand for Cigarettes Using Panel Data: The Effects of Bootlegging, Taxation and Advertising Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 148-55, February.
  2. Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627 Elsevier.
  3. Baltagi, Badi H. & Levin, Dan, 1992. "Cigarette taxation: Raising revenues and reducing consumption," Structural Change and Economic Dynamics, Elsevier, vol. 3(2), pages 321-335, December.
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Cited by:
  1. Massimo Filippini & Giuliano Masiero, 2011. "An empirical analysis of habit and addiction to antibiotics," Working Papers 1110, Department of Economics and Technology Management, University of Bergamo.
  2. Kazuki Kamimura, 2012. "Effectiveness of cigarette tax in Japan," Keio/Kyoto Joint Global COE Discussion Paper Series 2011-035, Keio/Kyoto Joint Global COE Program.

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