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A ‘long march’ perspective on tobacco use in Canada

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  • Nikolay Gospodinov
  • Ian Irvine

Abstract

. In this paper we present a model of tobacco demand in Canada, with a view to establishing if price and tax policy on the one hand or educational, regulatory, and demographic influences on the other have been primarily responsible for the substantial drop in consumption since 1980. We address some methodological and econometric issues that have escaped the attention of some analysts to this point. Using data for the period 1972–2000, we find that non‐price developments have had a strong deterrent effect and that the price elasticity of demand is now lower than even the recently obtained low estimates propose. These findings have strong public policy content. JEL Classification: I12, C13, C22 Une perspective de «longue haleine» sur l’usage du tabac au Canada. Dans ce mémoire, on présente un modèle de la demande de tabac au Canada en vue d’établir laquelle des deux stratégies – d’une part, la politique de prix et d’imposition de taxes, et d’autre part, les influences de l’éducation, de la réglementation ainsi que les changements démographiques – a été davantage responsable de la chute importante dans la consommation du tabac depuis 1980. Le texte examine certains problèmes méthodologiques et économétriques qui ont jusqu’ici échappéà l’attention des analystes. A l’aide de données pour la période 1972–2000, on montre que les facteurs qui n’ont rien à voir avec le prix ont eu un fort effet dissuasif, et que l’élasticité de la demande par rapport au prix est maintenant plus faible que les faibles élasticités suggérées par certaines études récentes. Ces résultats ont une grande importance pour la politique publique.

Suggested Citation

  • Nikolay Gospodinov & Ian Irvine, 2005. "A ‘long march’ perspective on tobacco use in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(2), pages 366-393, May.
  • Handle: RePEc:wly:canjec:v:38:y:2005:i:2:p:366-393
    DOI: 10.1111/j.0008-4085.2005.00284.x
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    Cited by:

    1. Auld M. Christopher & Zarrabi Mahmood, 2015. "Long-Term Effects of Tobacco Prices Faced by Adolescents," Forum for Health Economics & Policy, De Gruyter, vol. 18(1), pages 1-24, January.
    2. Gospodinov, Nikolay & Irvine, Ian, 2009. "Tobacco taxes and regressivity," Journal of Health Economics, Elsevier, vol. 28(2), pages 375-384, March.
    3. Anindya Sen, 2009. "Estimating the impacts of household behavior on youth smoking: evidence from Ontario, Canada," Review of Economics of the Household, Springer, vol. 7(2), pages 189-218, June.
    4. Latif, Ehsan, 2014. "The impact of recession on drinking and smoking behaviours in Canada," Economic Modelling, Elsevier, vol. 42(C), pages 43-56.
    5. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.

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    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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