Impact of Tobacco Control Policies on Cigarette Consumption in Malaysia

Authors

  • Norashidah Mohamed Nor School of Business and Economics, Universiti Putra Malaysia
  • Wency Kher Thinng Bui School of Business and Economics, Universiti Putra Malaysia
  • Judhiana Abd. Ghani School of Business and Economics, Universiti Putra Malaysia
  • Noraryana Hassan Tobacco Control Unit, Disease Control Division, Ministry of Health, Malaysia
  • Nizam Baharom Faculty of Medicine and Health Sciences, Universiti Sains Islam Malaysia

DOI:

https://doi.org/10.33736/ijbs.5199.2022

Keywords:

Tobacco Control Policy, Fully Modified Ordinary Least Square, Elasticity of Demand

Abstract

Raising the cigarettes price is an important measure to reduce the consumption of cigarettes and smoking rate. Besides price, other measures of tobacco control policies also play essential roles in determining the demand for cigarettes in Malaysia. In this study, the impact of tobacco control policies on consumption of cigarettes was examined using the fully modified ordinary least squares (FMOLS) technique. The study found that higher cigarettes price due to excise tax significantly decreased consumption of cigarette in the long run. An increase of 10% in the price of cigarettes reduces 7.69% of its consumption. Other measures of tobacco control policies except the “Tak Nak” campaign were also found to have reduced the consumption of cigarette significantly. The study concludes that the effective ways of reducing the use of cigarettes are by increasing the cigarette tax and strengthening the enforcement of other tobacco policies measures.

References

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Chaloupka, F. J., Yurekli, A., & Fong, G. T. (2012). Tobacco taxes as a tobacco control strategy. Tobacco Control, 21(2), 172-180. https://doi.org/10.1136/tobaccocontrol-2011-050417

Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(4), 427-431. https://doi.org/10.1080/01621459.1979.10482531

Dickey, D. A., & Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49(4), 1057-1072. https://doi.org/10.2307/1912517

Hammond, D., Fong, G. T., Cummings, K. M., & Hyland, A. (2005). Smoking topography, brand switching, and nicotine delivery: Results from an in vivo study. Cancer Epidemiology Biomarkers and Prevention, 14(6), 1370-1375. https://doi.org/10.1158/1055-9965.EPI-04-0498

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John, R. M. (2008). Price elasticity estimates for tobacco and other addictive goods in India. Health Policy and Planning, 23(3), 200-209. https://doi.org/10.1093/heapol/czn007

Levy, D. T., Currie, L., & Clancy, L. (2013). Tobacco control policy in the UK: Blueprint for the rest of Europe?. European Journal of Public Health, 23(2), 201-206. https://doi.org/10.1093/eurpub/cks090

Levy, D. T., & Friend, K. (2001). A computer simulation model of mass media interventions directed at tobacco use. Preventive Medicine, 32(3), 284-294. https://doi.org/10.1006/pmed.2000.0808

Li, J. & Grigg, M. (2009). New Zealand: New graphic warnings encourage registrations with the quitline. Tobacco Control, 18(1), 72-72. https://doi.org/10.1136/tc.2008.027649

MacKinnon, J. G. (1996). Numerical distribution functions for unit root and cointegration tests. Journal of Applied Econometric, 11(6), 601-618. https://doi.org/10.1002/(SICI)1099-1255(199611)11:6<601::AID-JAE417>3.0.CO;2-T

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Phillips, P. C. B., & Hansen, B. E. (1990). Statistical inference in instrumental variables regression with I(1) processes. The Review of Economic Studies, 57(1), 99-125. https://doi.org/10.2307/2297545

Phillips, P. C. B., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335-346. https://doi.org/10.1093/biomet/75.2.335

Ross, H., & Al-Sadat, N. (2007). Demand analysis of tobacco consumption in Malaysia. Nicotine and Tobacco Research, 9(11), 1163-1169. https://doi.org/10.1080/14622200701648433

Tan, Q. Y., Zomer, E., Owen, A. J., Chin, K. L., & Liew, D. (2019). Impact of tobacco use on health and work productivity in Malaysia. Tobacco control, 1-7. http://dx.doi.org/10.1136/tobaccocontrol-2018-054677

Thrasher, J. F., Hammond, D., Fong, G. T., & Arillo-Santillán, E. (2007). Smokers' reactions to cigarette package warnings with graphic imagery and with only text: A comparison between Mexico and Canada. Salud Publica de Mexico, 49(S2), 233-240. https://doi.org/10.1590/S0036-36342007000800013

Townsend, J., Roderick, P., & Cooper, J. (1994). Cigarette smoking by socioeconomic group, sex, and age: effects of price, income, and health publicity. BMJ, 309, 923-927. https://doi.org/10.1136/bmj.309.6959.923

WHO. (2011). WHO report on the global tobacco epidemic, 2011: Warning about the dangers of tobacco. World Health Organization. https://apps.who.int/iris/handle/10665/44616

WHO. (2013). WHO report on the global tobacco epidemic, 2013: Enforcing bans on tobacco advertising, promotion and sponsorship. World Health Organization. https://apps.who.int/iris/bitstream/handle/10665/85380/9789241505871_eng.pdf?sequence=1

WHO. (2015). WHO report on the global tobacco epidemic, 2015: Raising taxes on tobacco. World Health Organization. https://apps.who.int/iris/handle/10665/178574

WHO. (2019). WHO report on the global tobacco epidemic, 2019: Offer help to quit tobacco use. World Health Organization. https://www.who.int/publications/i/item/9789241516204Arumugam, T (2017, May 14). Government to stub out tobacco use by raising taxes further. News Strait Times. https://www.nst.com.my/news/exclusive/2017/05/238983/government-stub-out-tobacco-use-raising-taxes-further.

Bishop, J. A., Liu, H., & Meng, Q. (2007). Are Chinese smokers sensitive to price?. China Economic Review, 18(2), 113-121. https://doi.org/10.1016/j.chieco.2006.12.001

Borland, R., Yong, H. H., Wilson, N., Fong, G. T., Hammond, D., Cummings, K. M., Hosking, W., & McNeill, A. (2009). How reactions to cigarette packet health warnings influence quitting: Findings from the ITC four-country survey. Addiction, 104(4), 669-675. https://doi.org/10.1111/j.1360-0443.2009.02508.x

Chaloupka, F. J., Yurekli, A., & Fong, G. T. (2012). Tobacco taxes as a tobacco control strategy. Tobacco Control, 21(2), 172-180. https://doi.org/10.1136/tobaccocontrol-2011-050417

Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(4), 427-431. https://doi.org/10.1080/01621459.1979.10482531

Dickey, D. A., & Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49(4), 1057-1072. https://doi.org/10.2307/1912517

Hammond, D., Fong, G. T., Cummings, K. M., & Hyland, A. (2005). Smoking topography, brand switching, and nicotine delivery: Results from an in vivo study. Cancer Epidemiology Biomarkers and Prevention, 14(6), 1370-1375. https://doi.org/10.1158/1055-9965.EPI-04-0498

Institute for Public Health. (2020). National health and morbidity survey (NHMS) 2019: Non-communicable diseases, healthcare demand, and health literacy - Key findings. National Institute of Health, Ministry of Health. https://iptk.moh.gov.my/images/technical_report/2020/4_Infographic_Booklet_NHMS_2019_-_English.pdf

John, R. M. (2008). Price elasticity estimates for tobacco and other addictive goods in India. Health Policy and Planning, 23(3), 200-209. https://doi.org/10.1093/heapol/czn007

Levy, D. T., Currie, L., & Clancy, L. (2013). Tobacco control policy in the UK: Blueprint for the rest of Europe?. European Journal of Public Health, 23(2), 201-206. https://doi.org/10.1093/eurpub/cks090

Levy, D. T., & Friend, K. (2001). A computer simulation model of mass media interventions directed at tobacco use. Preventive Medicine, 32(3), 284-294. https://doi.org/10.1006/pmed.2000.0808

Li, J. & Grigg, M. (2009). New Zealand: New graphic warnings encourage registrations with the quitline. Tobacco Control, 18(1), 72-72. https://doi.org/10.1136/tc.2008.027649

MacKinnon, J. G. (1996). Numerical distribution functions for unit root and cointegration tests. Journal of Applied Econometric, 11(6), 601-618. https://doi.org/10.1002/(SICI)1099-1255(199611)11:6<601::AID-JAE417>3.0.CO;2-T

MOH. (2016). The Relationships between tobacco taxation and demand determinants to reduce cigarettes consumption and smoking prevalence in Malaysia. Ministry of Health, Malaysia.

MOH. (2017). Annual Report Ministry of Health Malaysia 2017. Ministry of Health Malaysia. https://www.moh.gov.my/moh/resources/Penerbitan/Penerbitan%20Utama/Annual%20Report%20MoH%202017.pdf

Norashidah, M. N., Nik Mustapha, R. A., & Mastura, Y. (2013). Cigarettes demand and tax strategy in Malaysia. Pertanika Journal of Social Science and Humanities, 21(S), 99-114. http://psasir.upm.edu.my/id/eprint/30860/1/Cigarettes%20Demand%20and%20Tax%20Strategy%20in%20Malaysia.pdf

Phillips, P. C. B., & Hansen, B. E. (1990). Statistical inference in instrumental variables regression with I(1) processes. The Review of Economic Studies, 57(1), 99-125. https://doi.org/10.2307/2297545

Phillips, P. C. B., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335-346. https://doi.org/10.1093/biomet/75.2.335

Ross, H., & Al-Sadat, N. (2007). Demand analysis of tobacco consumption in Malaysia. Nicotine and Tobacco Research, 9(11), 1163-1169. https://doi.org/10.1080/14622200701648433

Tan, Q. Y., Zomer, E., Owen, A. J., Chin, K. L., & Liew, D. (2019). Impact of tobacco use on health and work productivity in Malaysia. Tobacco control, 1-7. http://dx.doi.org/10.1136/tobaccocontrol-2018-054677

Thrasher, J. F., Hammond, D., Fong, G. T., & Arillo-Santillán, E. (2007). Smokers' reactions to cigarette package warnings with graphic imagery and with only text: A comparison between Mexico and Canada. Salud Publica de Mexico, 49(S2), 233-240. https://doi.org/10.1590/S0036-36342007000800013

Townsend, J., Roderick, P., & Cooper, J. (1994). Cigarette smoking by socioeconomic group, sex, and age: effects of price, income, and health publicity. BMJ, 309, 923-927. https://doi.org/10.1136/bmj.309.6959.923

WHO. (2011). WHO report on the global tobacco epidemic, 2011: Warning about the dangers of tobacco. World Health Organization. https://apps.who.int/iris/handle/10665/44616

WHO. (2013). WHO report on the global tobacco epidemic, 2013: Enforcing bans on tobacco advertising, promotion and sponsorship. World Health Organization. https://apps.who.int/iris/bitstream/handle/10665/85380/9789241505871_eng.pdf?sequence=1

WHO. (2015). WHO report on the global tobacco epidemic, 2015: Raising taxes on tobacco. World Health Organization. https://apps.who.int/iris/handle/10665/178574

WHO. (2019). WHO report on the global tobacco epidemic, 2019: Offer help to quit tobacco use. World Health Organization. https://www.who.int/publications/i/item/9789241516204

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Published

2022-12-19

How to Cite

Norashidah Mohamed Nor, Wency Kher Thinng Bui, Judhiana Abd. Ghani, Noraryana Hassan, & Nizam Baharom. (2022). Impact of Tobacco Control Policies on Cigarette Consumption in Malaysia. International Journal of Business and Society, 23(3), 1739–1752. https://doi.org/10.33736/ijbs.5199.2022