Cigarette Consumption, Taxation, and Household Income : Indonesia Case Study

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dc.creatorAdioetomo, Sri Moertiningsih
dc.creatorDjutaharta, Triasih
dc.creatorHendratno
dc.date2013-06-04T19:41:40Z
dc.date2013-06-04T19:41:40Z
dc.date2005-02
dc.date.accessioned2026-07-01T01:23:47Z
dc.descriptionCigarette consumption has been increasing in Indonesia, as in many other developing countries, causing a rising burden of disease and premature death. Higher excise taxes have proved effective in many countries in reducing cigarette consumption and raising government revenues. This study examines the effect of higher prices/taxes on the decision to smoke, the quantity of cigarettes consumed by smokers in different income groups in Indonesia, and government revenues. It uses 1999 Social and Economic Survey (SUSENAS) household data, with households as the unit of analysis. There was at least one smoker in 57 percent of all households. Most households smoked kretek cigarettes with filters (64 percent), or without filters (31 percent). Average household monthly cigarette consumption was 18 packs of 16 cigarettes. Per capita cigarette consumption was higher for higher income households: 7.83 packs per month, compared to 4 packs for low-income households. On average, households spent 6.22 percent of their total income on cigarettes and kreteks, lower-income households spent the highest percentage. The study suggests that price is not a significant factor in household decisions to smoke or not, but has a significant effect on the quantity of cigarettes smoked: each 10 percent increase in price would reduce total cigarette consumption by 6 percent. The reduction would be higher-nearly 7 percent-among low-income households, and lower-3 percent-among high-income households. Cigarette consumption increases as income rises: a 10 percent increase in household income would increase consumption by 6.5 percent, with a particularly strong effect among low-income households-a 9 percent increase-but little change among high income households-an increase of less than 1 percent. Simulations show that a 10 percent tax increase that raised cigarette prices by 4.9 percent would reduce consumption by 3 percent, and increase tax revenues by 6.7 percent, ceteris paribus, including assuming no significant switching among cigarette products with different prices and tax levels.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2005/02/5702526/cigarette-consumption-taxation-household-income-indonesia-case-study
dc.identifierhttps://hdl.handle.net/10986/13737
dc.identifierhttps://doi.org/10.1596/13737
dc.identifier.urihttp://hdl.handle.net/123456789/417707
dc.languageEnglish
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationHealth, Nutrition and Population (HNP) discussion paper;
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo
dc.rightsWorld Bank
dc.subjectADVERTISING
dc.subjectAGED
dc.subjectBRANDS
dc.subjectBURDEN OF DISEASE
dc.subjectCATERING
dc.subjectCONSUMPTION INCREASES
dc.subjectDAMAGES
dc.subjectDEVELOPED COUNTRIES
dc.subjectDISEASE CONTROL
dc.subjectDISEASES
dc.subjectECONOMIC IMPACT
dc.subjectECONOMIC STATUS
dc.subjectECONOMISTS
dc.subjectEDUCATION
dc.subjectEPIDEMIOLOGY
dc.subjectEXCISE TAXES
dc.subjectEXPENDITURES
dc.subjectEXPORTS
dc.subjectFORESTRY
dc.subjectGOODS/SERVICES
dc.subjectGOVERNMENT REGULATION
dc.subjectHEALTH COSTS
dc.subjectHEALTH EFFECTS
dc.subjectHEALTH IMPACTS
dc.subjectHEALTH RISKS
dc.subjectHEALTH WARNINGS
dc.subjectHUMAN DEVELOPMENT
dc.subjectIMPORTS
dc.subjectINCOME
dc.subjectINCOME GROUPS
dc.subjectINCOME LEVELS
dc.subjectINSURANCE
dc.subjectINTERVENTION
dc.subjectLABOR FORCE
dc.subjectMANAGERS
dc.subjectMARKETING
dc.subjectMEDIA
dc.subjectNICOTINE DEPENDENCE
dc.subjectNUTRITION
dc.subjectPARTNERSHIP
dc.subjectPOLICY DECISIONS
dc.subjectPOLICY MAKERS
dc.subjectPREMATURE DEATH
dc.subjectPRICE CHANGES
dc.subjectPRICE ELASTICITY
dc.subjectPRICE ELASTICITY OF DEMAND
dc.subjectPRICE INCREASES
dc.subjectPRICES/TAXES
dc.subjectPRODUCERS
dc.subjectPUBLIC HEALTH
dc.subjectPURCHASING
dc.subjectPURCHASING POWER
dc.subjectREGRESSION ANALYSIS
dc.subjectRETAIL
dc.subjectRETAIL PRICES
dc.subjectSALES
dc.subjectSEX
dc.subjectSMOKERS
dc.subjectSMOKING
dc.subjectSOCIAL STATUS
dc.subjectSUBSTITUTION
dc.subjectTAX RATES
dc.subjectTAX REVENUE
dc.subjectTAX REVENUES
dc.subjectTAXATION
dc.subjectTOBACCO
dc.subjectTOBACCO CONTROL
dc.subjectTOBACCO USE
dc.subjectWORKERS
dc.titleCigarette Consumption, Taxation, and Household Income : Indonesia Case Study

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