The effect of price on cigarette consumption among youth in Indonesia: Implications for tobacco tax policy

• Published date: 01 December 2022
• Author: Ridhwan Fauzi,Sathirakorn Pongpanich
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/wmh3.516

Received: 8 November 2021

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Revised: 13 January 2022

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Accepted: 11 March 2022

DOI: 10.1002/wmh3.516

ORIGINAL ARTICLE

The effect of price on cigarette consumption

among youth in Indonesia: Implications for

tobacco tax policy

Ridhwan Fauzi

1,2

|Sathirakorn Pongpanich

1

1

College of Public Health Sciences,

Chulalongkorn University, Pathumwan,

Bangkok, Thailand

2

Faculty of Public Health, Universitas

Muhammadiyah Jakarta, South Tangerang,

Banten, Indonesia

Correspondence

Ridhwan Fauzi, Faculty of Public Health,

Universitas Muhammadiyah Jakarta, Jl. K.H.

Ahmad Dahlan, Cireundeu, Ciputat, South

Tangerang City, Banten, Indonesia.

Email: ridhwanfauzi@umj.ac.id

Sathirakorn Pongpanich, College of Public

Health Sciences, Chulalongkorn University,

Phayathai Road, Wangmai, Pathumwan,

Bangkok, Thailand.

Email: sathirakorn.p@chula.ac.th

Funding information

Chulalongkorn University Graduate School

Thesis, Grant/Award Number: 2/2564

Abstract

Thestudyaimedtoestimatecigarettepriceelasticity

among youth in Indonesia. We used a two‐part model to

estimate the impact of price on smoking participation

and smoking intensity on smokers. Data were obtained

from National Socioeconomic Survey or Survei Sosial

Ekonomi Nasional 2015, 2016, 2017, 2019, and 2020.

This study included males and females aged 15–24

years from all districts. We controlled for socio-

economic variables such as age, sex, education,

working status, marital status, wealth quintile, place of

residence, geographical region, and year of the survey.

Price was negatively associated with cigarette con-

sumption. The estimated total cigarette price elasticity

was approximately −0.6740, meaning a 10% increase

in price would reduce cigarette consumption by 6.74%.

We also found that females were more sensitive to

price change than males. This result indicated that the

percentage change in demand for cigarettes among

youth is less than the percentage change in price or

inelastic. Therefore, a higher tariff and simpler tobacco

tax structure is necessary to make cigarettes less

affordable in Indonesia.

KEYWORDS

cigarette, demand, Indonesia, price, tax, tobacco, youth

Key points

•Price was negatively and significantly associated with

youth smoking behavior, indicating that pricing policy

through taxation would reduce smoking behavior

among youth in Indonesia.

•The demand for cigarettes among youth in Indonesia

was inelastic to price change. Thus, a substantial

World Med. & Health Policy. 2022;14:665–678.wileyonlinelibrary.com/journal/wmh3 © 2022 Policy Studies Organization.

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