<![CDATA[This study analyzes the effect of excise of cigarette price changes to the consumption of cigarette and Central Java’s economy and household income. In the first stage, with employing panel data regression model,i.e. fixed effect model (FEM) which include 35 regencies/cities in Central Java Province during 2009-2013, the study examines the effect of cigarette excise to cigarette consumption. On the next stage, the study simulatesthe impact of cigarette consumption shock to the Central Java’s sectoral economy and household income using the Central Java 2013 Input-Output table. The findings indicate that the cigarette excise has a tradeoff effect tohousehold’s cigarette consumption. The increase of cigarette excise reduces cigarette consumption, and next, reduces output and sectoral household income. The cigarettes industries suffered the highest impact of thedecrease of the cigarette consumption, followed by other sectors which is has a high link to cigarette industries such as agricultures and tobacco sectors.Keywords: cigarette, excise, panel data regression, input-output analysis]]>
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