OLS | IV | FE | |||||||
Coefficient | Robust SE | P values | Coefficient | Robust SE | P values | Coefficient | SE | P values | |
Tax | 0.43 | 0.03 | 0.00 | 0.56 | 0.09 | 0.00 | 0.34 | 0.02 | 0.00 |
Age | −0.03 | 0.01 | 0.00 | −0.03 | 0.01 | 0.00 | – | – | – |
Female | −1.37 | 0.91 | 0.14 | −1.15 | 0.92 | 0.21 | – | – | – |
Years of education | |||||||||
1–8 | −0.39 | 0.38 | 0.30 | −0.16 | 0.41 | 0.70 | −0.81 | 0.58 | 0.16 |
9 or more | −2.26 | 0.50 | 0.00 | −1.96 | 0.54 | 0.00 | −1.35 | 0.76 | 0.08 |
Occupation | |||||||||
Self-employed in non-farm agriculture | −1.10 | 0.84 | 0.19 | −1.55 | 0.86 | 0.07 | −0.04 | 0.91 | 0.97 |
Self-employed in non-agricultural activity | −0.77 | 0.38 | 0.04 | −1.55 | 0.40 | 0.00 | −0.50 | 0.51 | 0.33 |
Farm wage labourer | 1.54 | 0.50 | 0.00 | 2.11 | 0.53 | 0.00 | 0.80 | 0.61 | 0.19 |
Non-farm agricultural wage labourer | 0.13 | 0.74 | 0.86 | −0.79 | 0.70 | 0.26 | 0.44 | 0.94 | 0.64 |
Non-agricultural wage labourer | 1.43 | 0.49 | 0.00 | 0.74 | 0.48 | 0.12 | 1.31 | 0.54 | 0.02 |
Professional | −1.73 | 0.98 | 0.08 | −1.33 | 1.14 | 0.24 | −0.93 | 1.20 | 0.44 |
Managerial, administrative or clerking | −1.26 | 0.68 | 0.06 | −2.54 | 0.76 | 0.00 | −0.19 | 0.76 | 0.81 |
Student | 2.54 | 1.37 | 0.06 | 2.37 | 1.56 | 0.13 | 2.66 | 1.12 | 0.02 |
Unemployed | 1.27 | 0.68 | 0.06 | 0.43 | 0.73 | 0.56 | 0.66 | 0.70 | 0.35 |
Housewife/housekeeper/household manager | 1.37 | 0.98 | 0.16 | 0.96 | 1.06 | 0.37 | 0.99 | 1.10 | 0.37 |
Others | 0.41 | 0.43 | 0.34 | −0.08 | 0.43 | 0.86 | 0.00 | 0.48 | 0.99 |
Socioeconomic status | |||||||||
Moderate | −0.59 | 0.37 | 0.11 | 0.03 | 0.39 | 0.95 | – | – | – |
High | −2.67 | 0.36 | 0.00 | −2.09 | 0.38 | 0.00 | – | – | – |
Rural area of residence | 2.39 | 2.10 | 0.26 | 2.76 | 0.37 | 0.00 | – | – | – |
RIP | |||||||||
Cigarette brands | |||||||||
Medium | −0.99 | 0.53 | 0.06 | −3.25 | 1.75 | 0.06 | 0.17 | 0.47 | 0.72 |
High | −2.31 | 1.29 | 0.07 | −9.41 | 4.24 | 0.03 | 3.42 | 0.88 | 0.00 |
Premium | −10.05 | 2.34 | 0.00 | −24.50 | 7.94 | 0.00 | 1.50 | 1.51 | 0.32 |
Trend | |||||||||
Wave 2 | −1.29 | 0.34 | 0.00 | −1.14 | 0.35 | 0.00 | −1.52 | 0.27 | 0.00 |
Wave 3 | −2.48 | 0.42 | 0.00 | −3.39 | 0.84 | 0.00 | −2.88 | 0.35 | 0.00 |
Wave 4 | −7.11 | 0.46 | 0.00 | −8.90 | 1.29 | 0.00 | −7.22 | 0.39 | 0.00 |
Constant | 12.12 | 2.69 | 0.00 | 7.97 | 0.77 | 0.00 | 7.69 | 0.70 | 0.00 |
Number of observations | 5882 | 5882 | 5882 | ||||||
R2 | 0.54 | 0.47 | 0.35 |
Reference categories include male, persons with 0 year of education, owner/tenant farmers, low socioeconomic status, urban area of residence, low cigarette brands and Wave 1 (2009).
The SEs of OLS estimates are adjusted for autocorrelation of error terms of multiple observations on the same individual. The village effects in OLS regression are suppressed for the brevity of presentation.
The village variable is used as an instrument for tax in the IV estimation. The test statistics for exogeneity of the tax variable using the Durbin-Wu-Hausman test is statistically insignificant (robust regression F(1, 2552)=2.18, p=0.1403) suggesting exogeneity. The adjusted R2 from the first-stage regression of tax is 0.9021, suggesting strong predictability of variations in tax using village-level variation.
The age variable drops out of the FE regression due to perfect collinearity with the wave variables. Gender, socioeconomic status and area of residence variables are time invariant and hence drop out of the FE regression as well.