Asian Economic Journal 2009, Vol. 23 No. 1, 1–17 1 © 2009 The Authors Journal compilation © 2009 East Asian Economic Association and Blackwell Publishing Ltd. Role of education In cigarette smoking Role of Education in Cigarette Smoking: An Analysis of Malaysian Household Survey Data* Andrew K.G. Tan, Steven T. Yen and Rodolfo M. Nayga, Jr. Received 4 November 2007; accepted 14 October 2008 Heckman’s sample selection model is used to examine the role of education on household purchase decisions and expenditures of tobacco products in Malaysia. Results of the marginal effects of education, segmented by ethnic and gender groups, suggest that education decreases the probability, conditional levels and unconditional levels of tobacco expenditures amongst Malaysian households. Specifically, an additional year of education of the household head, irrespective of ethnic or gender considerations, decreases smoking probability by 1.5 percent. However, the negative effect of education seems to be higher for Chinese (US$1.07) than Malay (US$0.26) households in terms of conditional expenditures. Furthermore, education significantly decreases conditional tobacco expenditures within male- headed households. Keywords: tobacco expenditures; purchase decisions; education; sample selection model; Malaysia. JEL classification codes: D12, I21. doi: 10.1111/j.1467-8381.2009.02004.x I. Introduction Cigarette smoking in Malaysia has been estimated to account for 1 out of every 5 deaths in the country (MOH, 2003). While Malaysian health statistics have recorded close to 40 000 deaths over the past 5 years, an additional half a million coronary events have been attributed to cigarette smoking (WHO, 2002; MOH, 2003). In addition, incidents of lung cancer are increasing at an annual rate of 17 percent, with approximately 3500 new cases reported each year (WHO, 2002; Aljunid et al., 2006). The latest projections indicate that there are currently approximately 3.1 million smokers between the ages of 25 and 64 years in Malaysia. The prevalence of current smokers is reported to be 25.5 percent, comprising * Tan: School of Social Sciences, Universiti Sains Malaysia, 11800 Penang, Malaysia. Email: atan@usm.my. Yen: Department of Agricultural Economics, The University of Tennessee, Knoxville, TN 37996-4518, USA. Email: syen@utk.edu. Nayga: Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, AR 72701, USA. Email: Rnayga@uark.edu. Research support from the Universiti Sains Malaysia Research University (RU) grant (1001/PSOSIAL/816072) is acknowledged.