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Cigarette, Alcohol, and Drug Demand for Young Population

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  • Mohammed AL-MAHISH

    (King Faisal University, AlAhsa, Saudi Arabia)

Abstract

The purpose of this paper is to estimate demand elasticities of cigarette, alcohol, and cocaine for a sample of young American population. To deal with the inherent censoring issue in cigarette, alcohol, and drug consumption data, the paper applies ZINB, Tobit, and a two-step AIDS model. Findings indicate habit formation in young American consumption. Also, the results show that alcohol has an inelastic income elasticity. The ZINB model price elasticity, Marshallian own price elasticity, and Hicksian own price elasticity all agree that drug has a negative inelastic own price elasticity. This implies that price increased by drug traders increases their total revenue and slightly affects the quantity demanded of drug.

Suggested Citation

  • Mohammed AL-MAHISH, 2017. "Cigarette, Alcohol, and Drug Demand for Young Population," Expert Journal of Economics, Sprint Investify, vol. 5(2), pages 62-70.
    • Handle: RePEc:exp:econcs:v:5:y:2017:i:2:p:62-70
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    alchohol demand; censored data; cigarette demand; deman; drug demand;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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