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.
|Number of pages||13|
|Journal||International Journal of Environmental Research and Public Health|
|Publication status||Published - 1 Jun 2010|
- Cigarette consumption
- Methodology for panel data
- Myopic addictive models