Abstract

This study examines the impact of digitalization on access to household credit during the National Economic Recovery Program. Data from the National Socioeconomic Survey (Survei Sosial Ekonomi Nasional/Susenas) and Village Potential Statistics (Potensi Desa/Podes) from 2019 (pre-pandemic) and 2021 (one year post-pandemic) are used in this research. Using the binomial logit model-fixed effect, this research found that digitalization has a significant impact on access to household credit, both before and during the COVID-19 pandemic. The majority of households with access to credit are headed by males living in rural areas, who are married, working, graduated from junior high school or above, and are 30-59 years old. In line with the national economic recovery program, the government can accelerate financial inclusion by increasing access to household credit to all levels of the society without gender discrimination through banking digitalization. read more

Abstract

We analyze the optimal cigarette excise tax rate based on the optimal tax theory. We find that the optimal tax is different when there is an illegal production of cigarettes. We find that, without illegal production of cigarettes, the government can achieve the first best optimum condition by fully internalizing externality. The government can optimally choose the amount of tax on legal cigarettes that is equal to the marginal cost of health care. When there is an illegal production of cigarettes, we find that the rate of cigarette excise tax is not equal to the marginal cost of health care. Therefore, the government need more policy instruments to achieve the optimal tax rate in this case. We also find that an increase in the work hours of a legal cigarette production reduces illegal cigarette productions. Policymakers can use marginal income tax policy as an incentive to reduce illegal production of cigarettes. read more