This study estimates a dynamic model specification of demand for cigarette in Indonesia. The objectives are to test the rational addiction hypothesis of cigarettes demand, and to calculate price elasticity of cigarettes in the short-run and long-term. The data for this analysis were aggregate individual data from three-wave a panel surveys of the IFLS (Indonesian Family Life Survey) from 1993-2000. This study explores several econometric approaches, and selects the best fit of several statistical measures. The results indicate that cigarette indeed an addictive good (the lags consumption coefficients are a positive with p-value <1%). Whilts a negative coefficient and significancy of future consumption indicate that smokers are myopic addicts, they are not rational. The study also confirms that the demand is more price sensitive for the long-run than the short-run. The finding of myopic addiction has pratical implications with which policy-makers should re-design current public health campaign against cigarette smoking in the country. Various policy implications of the research findings are also discussed in this article.