The Demand for Tobacco in Post-Unification Italy
AbstractThis paper studies the demand for tobacco products in post-unification Italy. We construct a very detailed panel dataset of yearly consumption in the 69 Italian provinces from 1871 to 1913, and use it to estimate the demand for tobacco products. We find support for the Becker and Murphy (1988) rational addiction model. We also find that, in the period considered, tobacco was a normal good in Italy: aggregate tobacco consumption increased with income. Subsequently, we consider separately the four types of products which aggregate tobacco comprises (fine-cut tobacco, snuff, cigars, and cigarettes), and tentatively suggest that habit formation was a stronger factor on the persistence of consumption than physical addiction. The paper ends by showing that the introduction of the Bonsack machine in the early 1890s did not coincide with changes in the structure of the demand for tobacco, suggesting cost driven technological change.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9197.
Date of creation: Oct 2012
Date of revision:
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Other versions of this item:
- Carlo Ciccarelli & Gianni De Fraja, 2014. "The demand for tobacco in post-unification Italy," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 8(2), pages 145-171, May.
- Carlo Ciccarelli & Gianni De Fraja, 2012. "The Demand for Tobacco in Post-Unification Italy," Discussion Papers in Economics 12/13, Department of Economics, University of Leicester.
- Carlo Ciccarelli & Gianni De Fraja, 2014. "The Demand for Tobacco in Post-Unification Italy," Quaderni di storia economica (Economic History Working Papers) 31, Bank of Italy, Economic Research and International Relations Area.
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-11-11 (Agricultural Economics)
- NEP-ALL-2012-11-11 (All new papers)
- NEP-HEA-2012-11-11 (Health Economics)
- NEP-HIS-2012-11-11 (Business, Economic & Financial History)
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- Carlo Ciccarelli & Anna Missiaia, 2014. "Business Fluctuations in Imperial Austria's Regions, 1867-1913: New Evidence," CEIS Research Paper 312, Tor Vergata University, CEIS, revised 11 Apr 2014.
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