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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. Copyright (c) 2008 The Author. Journal compilation (c) Economic Society of South Africa 2008.

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
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    References listed on IDEAS

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    1. Marc Ground & Steven f Koch, 2008. "Hurdle Models Of Alcohol And Tobacco Expenditure In South African Households," South African Journal of Economics, Economic Society of South Africa, vol. 76(1), pages 132-143, March.
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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. Rankin Neil & Burger Rulof & Coetzee Wicus & Kreuser Friedrich, 2015. "Income and price elasticities of demand in South Africa: An application of the linear expenditure system," WIDER Working Paper Series 100, World Institute for Development Economic Research (UNU-WIDER).
    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. repec:spr:ijphth:v:62:y:2017:i:8:d:10.1007_s00038-017-0980-7 is not listed on IDEAS
    6. repec:eee:socmed:v:196:y:2018:i:c:p:19-28 is not listed on IDEAS

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