Abstract:
This study aims to (1) know the influence factor on demand and supply cigarette market of Thailand (2) estimate the economic welfare that affecting from the cigarette excise tax rate and (3) evaluate the worthiness of cigarette tax policy which compare with the cost related to the treatment of smoking patients. This research used the time series data from 1984 to 2016 or 33 years. The influence factor on demand and supply are analyzed by using simultaneous equation, estimated by Three Stage Least Square (TSLS) method and economic welfare computation. Then, the analysis employs the simulation which divided two periods. The first period uses the actual data from 2012 to 2016. The second period sets cigarette increasing 5 percent as total 5 times from the present tax at the 90 percent which forecasting data by double exponential smoothing in 2017 to 2021. Then, it calculates economic welfare and the the cost related to the treatment of smoking patients. The result are found that that cigarette price has negative relation on cigarette demand while the consumer price index has positive relation on demand. In other hand, the price was positive relation on cigarette supply while the selling cost and exchange rate were negative relation on supply. Moreover, cigarette tax and Gross Domestic Product were positive relation on the cigarette price. The simulation forasting results are shown that the rising of cigarette tax rate create the tax revenue however it decrease economic welfare which effect on producer’s surplus more than consumer’s surplus. From the results, the tax policy is still worth which on the economic welfare.
TRC Data Center