Influence of cigarette prices and social environment smoking on allocation of consumption allocation of consumption of food groups: analysis of Susenas 2014 Indonesia
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University of Indonesia, Economics and Business, Indonesia
Publication date: 2018-03-01
Tob. Induc. Dis. 2018;16(Suppl 1):A934
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The study of cigarette consumption is still partial by looking at how environmental influences are smoked against individual cigarette consumption / household, or crowding out effect due to price increase. The price of cigarettes is a fairly effective instrument in reducing tobacco consumption. The study question of how the effect of cigarette price changes affects the allocation of expenditure of food groups and household cigarettes by considering the social environment of cigarette society. The purpose to find out how the influence of cigarette prices and the social environment smokes its effect on the allocation of expenditure of 11 food groups, including cigarettes to households.

The method using Almost Ideal Demand System model, data data used Susenas 2014. Price is estimated from unit value by eliminating the effect of difference of fan quantity premier quality. Heckman procedures to address households that do not consume food / cigarette groups. The smoking social environment is projected from the prevalence of smoking at the district level from Riskesdas 2013 data. Variable controls are social and demographic characteristics of households, household expenditures, and the existence of district-level prohibition regulations.

The estimation results show that by incorporating the social environmental variables smoking, the price of cigarettes has less effect as price changes than the estimate that does not consider the social environment of smoking. The price of cigarettes will also decrease the allocation of household expenditure for certain commodity groups and decrease the allocation of household expenditure for some commodity groups.

The conclusion of the study, the effect of cigarette prices on cigarette consumption and other commodity consumption becomes different when considering the social environment of community smoking. The policy of cigarette control not only with economic variables but also considering social factors of society.