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Cigarette Demand In South Africa Over 1996‐2006: The Role Of Price, Income And Health Awareness

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  • Willem H. Boshoff

Abstract

The study seeks to re‐investigate the role of price, income and health awareness in the evolution of South African cigarette demand over the period 1996 to 2006. At first glance, rising cigarette prices appear to have played an important role in reducing cigarette consumption over the sample period, especially during the late 90s. But how dependent is the impact of price increases on general economic conditions and overall health awareness among smokers? Health awareness, in particular, has not received sufficient attention in the South African context, due to a lack of data. Previous estimates of price and income elasticities of cigarette demand are based on long annual time series data, which do not allow for changes in underlying tastes and preferences. The paper attempts to disentangle the forces of price, income, health awareness and policy intervention using a quarterly data set. In addition, the study also cautions against the upward bias in estimates derived from formal cigarette sales data – in the light of increasing illicit cigarette volumes in South Africa.

Suggested Citation

  • Willem H. Boshoff, 2008. "Cigarette Demand In South Africa Over 1996‐2006: The Role Of Price, Income And Health Awareness," South African Journal of Economics, Economic Society of South Africa, vol. 76(1), pages 118-131, March.
  • Handle: RePEc:bla:sajeco:v:76:y:2008:i:1:p:118-131
    DOI: 10.1111/j.1813-6982.2008.00157.x
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    References listed on IDEAS

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    1. Marc Ground & Steven F. Koch, 2007. "Hurdle Models of Alcohol and Tobacco Expenditure in South African Households," Working Papers 200703, University of Pretoria, Department of Economics.
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    Cited by:

    1. Adel Bosch and Steven F. Koch, 2014. "Using a Natural Experiment to Examine Tobacco Tax Regressivity," Working Papers 434, Economic Research Southern Africa.
    2. Craig Lemboe & Philip Black, 2012. "Cigarettes taxes and smuggling in South Africa: Causes and Consequences," Working Papers 09/2012, Stellenbosch University, Department of Economics.
    3. Rulof Petrus Burger & Lodewicus Charl Coetzee & Carl Friedrich Kreuser & Neil Andrew Rankin, 2017. "Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System," South African Journal of Economics, Economic Society of South Africa, vol. 85(4), pages 491-514, December.
    4. Alfred Kechia Mukong, 2017. "Peer Networks and Tobacco Consumption in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 85(3), pages 341-367, September.
    5. Li-Ming Ho & Christian Schafferer & Jie-Min Lee & Chun-Yuan Yeh & Chi-Jung Hsieh, 2017. "The effect of cigarette price increases on cigarette consumption, tax revenue, and smoking-related death in Africa from 1999 to 2013," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 62(8), pages 899-909, November.
    6. Koch, Steven F., 2018. "Quasi-experimental evidence on tobacco tax regressivity," Social Science & Medicine, Elsevier, vol. 196(C), pages 19-28.
    7. Rulof Petrus Burger & Lodewicus Charl Coetzee & Carl Friedrich Kreuser & Neil Andrew Rankin, 2017. "Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System," South African Journal of Economics, Economic Society of South Africa, vol. 85(4), pages 491-514, December.

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