Good intentions, unintended outcomes: Impact of social assistance on tobacco consumption in Indonesia.

Abstract

INTRODUCTIONSocial assistance programs create an income effect that allows low-income groups to raise their consumption to improve their well-being. However, this may unintentionally induce an increase in their consumption of temptation goods, including tobacco. By analyzing five massive social assistance programs distributed by the government since 2007, we explore whether those programs may induce increased smoking intensity in Indonesia.METHODSThis study is a quantitative study that applies a Tobit regression, Difference-in-Differences (DiD) regression, Difference regression, and two-sample t-test, using the 2017 Susenas (National Socioeconomic Survey) and the 2007 and 2014 Indonesia Family Life Survey. Estimations using sociodemographic, regional, and social assistance dummy variables are used to explore the impact of the programs on the intensity of cigarette consumption in Indonesia, simultaneously assessing the relationship between cigarette consumption and socioeconomic conditions.RESULTSOur estimations using Tobit regressions confirm that social assistance recipients consume 3.39 cigarettes per capita per week more than non-recipients. The DiD regressions on IFLS panel data show that social assistance programs significantly increase cigarette consumption by 2.8 cigarettes per capita per week. We also find that: 1) smokers have lower socioeconomic indicators than non-smokers in terms of nutrition and health and education expenditures, and 2) younger household members living with smokers have less educational attainment and higher average sick days.CONCLUSIONSThere is reasonable evidence to support the hypothesis that social assistance programs in Indonesia have contributed to the greater intensity of tobacco consumption among the recipients. The findings call for policy reforms in social assistance programs to be warier with the eligibility conditions for social assistance recipients. Adding new conditions related to smoking behaviors might reduce the smoking intensity of those in low-income groups and, in the long run, might improve the effectiveness of social assistance programs in raising the socioeconomic welfare of the low-income population.