| ID | 103933 |
| Title Proper | Quantity, quality, and regional price variation of cigarettes |
| Other Title Information | demand analysis based on a household survey in China |
| Language | ENG |
| Author | Chen, Yuyu ; Xing, Weibo |
| Publication | 2011. |
| Summary / Abstract (Note) | This paper investigates the price elasticity of cigarettes using an urban household survey in China. We find that cigarette price is an important determinant of smoking. In our two-part model, the overall price elasticity is - 0.82. Nevertheless, tobacco demand is influenced by both price and quality. We net out the quality effect of tobacco demand to obtain standard price elasticities, which are between - 0.70 and - 0.35. In addition, when we estimate two demand systems of Chinese households, the estimated own-price elasticities of cigarettes are - 0.57 and - 0.81. These elasticities suggest that if the tobacco excise tax rate goes up, cigarette consumption will drop rapidly, and government revenue from the tobacco tax will increase. |
| `In' analytical Note | China Economic Review Vol. 22, No. 2; Jun 2011: p.221-232 |
| Journal Source | China Economic Review Vol. 22, No. 2; Jun 2011: p.221-232 |
| Key Words | Cigarette Consumption ; Unit Value ; Deaton Model ; Demand System ; Tobacco Taxation |