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Rational Addiction and Smoking Cessation: Evidence from Vietnam

Author

Listed:
  • Tuong-Vy Phan

    (National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan)

  • Quang-Thanh Tran

    (Development and Policies Research Center (DEPOCEN), Hanoi, Vietnam and Research Center for Policy Design, Graduate School of Economics and Management, Tohoku University, Japan)

  • Anh Ngoc Nguyen

    (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi)

Abstract

In this paper, we apply the rational addiction model to analyze cigarette consumption and quitting behavior in Vietnam, using a unique three-wave longitudinal dataset from the IDRC–CTFK Tobacco Taxation Survey (2018–2020) that links a panel of smokers to a price panel from tobacco retailers. Using OLS and instrumental-variable methods, we find strong evidence of rational addiction among Vietnamese smokers. The estimated dynamics also yield the short-run and long-run effects on cigarette consumption of a permanent price increase, such as one brought about by higher excise taxes. Subgroup estimates suggest greater price sensitivity among younger and more risk-tolerant smokers. Turning to cessation, we find that heavier smokers are less likely to quit, while reported health concerns are the strongest predictor of quitting.

Suggested Citation

  • Tuong-Vy Phan & Quang-Thanh Tran & Anh Ngoc Nguyen, 2026. "Rational Addiction and Smoking Cessation: Evidence from Vietnam," Working Papers 204, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:0204
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    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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