Price Elasticity Estimates for Cigarette Demand in Vietnam
AbstractIn this paper, we analyze a complete demand system to estimate the price elasticity for cigarette demand in Vietnam. Following Deaton (1990), we build a spatial panel using cross sectional household survey data. We consider a model of simultaneous choice of quantity and quality. This allows us to exploit unit values from cigarette consumption in order to disentangle quality choice from exogenous price variations. We then rely on spatial variations in prices and quantities demanded to estimate an Almost Ideal Demand System. The estimated price elasticity for cigarette demand is centered around -0.53, which is in line with previous empirical studies for developing countries.
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Bibliographic InfoPaper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 05.
Length: 27 pages
Date of creation: 2009
Date of revision:
Price elasticity; Cigarette Demand; Taxation; Consumption; Vietnam.;
Other versions of this item:
- Eozenou, Patrick & Fishburn, Burke, 2001. "Price Elasticity Estimates of Cigarette Demand in Vietnam," MPRA Paper 12779, University Library of Munich, Germany, revised Nov 2007.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
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- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June.
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