Impact of the Free Trade Zone on Cigarette Consumption: An Examination of Indonesian Households
Journal Title: GATR Journal of Business and Economics Review - Year 2017, Vol 2, Issue 4
Abstract
Objective – The purpose of this research is to evaluate the impact of the Free Trade Zone (‘FTZ’) in the Riau Islands Province (Batam, Bintan and Karimun) on specific products, i.e. cigarettes. Methodology/Technique – To investigate the demand for cigarettes in the FTZ area, this study examines data on cigarette consumption in Batam and surrounding areas before and after the implementation of the FTZ. The data is collected from SUSENAS surveys conducted in 2003, 2005, 2008, 2011 and 2014. To examine the net impact of the FTZ, this study also uses an experimental approach; the implementation of the FTZ can be viewed as a natural influence on a decrease in prices of specific products. The subject group includes households in the Riau Islands Province. Households in the surrounding provinces are therefore used a control groups. Several indicators were used to identify and establish the control groups, including: cigarette consumption, population, sex ratio, life expectancy and education level. Following this criteria, Bengkulu Province was selected as the ideal group of control candidates. Findings – The results show that there has been a significant increase in cigarette consumption in the Riau Islands Province following the implementation of the FTZ. Novelty – The introduction of the FTZ means that trade commodities, including cigarettes, are no longer subject to excise duty. As a result, the selling price of tobacco products has become very cheap.
Authors and Affiliations
Mohtar Rasyid
Keywords
Related Articles
- EP ID EP273480
- DOI -
- Views 148
- Downloads 0
Determinant Factors of Trade Industry Performance in Indonesia: AHP Approach
Objective – This research analyses determinant factors and priority factors of trade industry performance based on 15 industries in Indonesia. Today, trade industry tends to develop well in Indonesia. It covers exporters...
The Strategy of Street Vendors in Facing Local Government Policy. A Case of Street Vendor in Bandung
Objective - The presence of street vendors in public places has emerged some problems, such as disordered situation, traffic jam and decreasing aesthetics of the city. In order to overcome the problems, Bandung have some...
Innovation Capability and Customer Relationship Management in Building Competent Young Entrepreneurs
Objective - The study aims to learn effect ofInnovation Capability and Customer Relationship Management on young entrepreneur's competency. Methodology/Technique - Questionnaire used for the data collection in this stud...
Optimization of Exclusive Economic Zone to Maintain and Protect Marine Natural Resources for the Welfare of the People of Indonesia
Objective – The purpose of the present study is to determine Indonesia’s efforts to maintain and protect the fishery resources. Methodology/Technique – The present study used the normative juridical research method by re...
Impact of the Free Trade Zone on Cigarette Consumption: An Examination of Indonesian Households
Objective – The purpose of this research is to evaluate the impact of the Free Trade Zone (‘FTZ’) in the Riau Islands Province (Batam, Bintan and Karimun) on specific products, i.e. cigarettes. Methodology/Technique – To...