We conduct cusum tests of structural change in a rational addiction model of cigarette demand estimated using a panel of annual time series of state-level data. In contrast to the one previous application of cusum tests to the question of cigarette demand stability, our results provide strong evidence of downward shifts in demand during the modern era of health warnings and anti-smoking campaigns.
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12425.
Length: 11 pages Date of creation: 30 Sep 2005 Date of revision: Publication status: Published in Economics Bulletin, September 2005, Vol. 9, No. 8, pp. 1-11. Handle: RePEc:isu:genres:12425
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