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Prices and social behaviour: Evidence from adult smoking in Canadian Aboriginal communities

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  • Jesse A. Matheson

Abstract

This paper provides estimates of tobacco price elasticity explicitly distinguishing between two price effects: the direct effect, reflecting individual reaction to a price change, and the indirect effect, whereby price influences the individual by changing community smoking behaviour. Canada's Aboriginal communities are small and secluded, allowing for plausible identification of reference groups on a relatively large scale. Estimates suggest a 10% increase in price decreases daily smoking by 0.91 percentage points (2.11%), occasional smoking by 1.24 percentage points (8.27%) and average smoking intensity by 0.15 cigarettes per day (2.9%). It is found that the indirect effect almost doubles the response to a change in tobacco prices over the direct effect alone. Prix et comportement social : résultats pour le tabagisme des adultes dans les communautés autochtones au Canada. Ce texte fournit des estimés de l'élasticité de la demande de tabac en réponse au changement de prix, en distinguant explicitement entre deux effets des prix : l'effet direct reflétant la réaction de l'individu au changement de prix, et l'effet indirect où le prix influence le comportement de l'individu via le changement dans le comportement tabagiste de la communauté. Les communautés autochtones sont petites et isolées au Canada, ce qui permet l'identification de groupes de référence sur une échelle relativement grande. Nos estimés suggèrent qu'une augmentation de prix de 10% diminue le tabagisme journalier de 0.91 points de pourcentage (2.11%), le tabagisme occasionnel de 1.24 points de pourcentage (8.71%), et l'intensité moyenne de tabagisme de 0.15 cigarettes par jours (2.9%). On découvre que l'effet indirect en réponse au changement de prix du tabac est presque le double du seul effet direct.

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  • Jesse A. Matheson, 2015. "Prices and social behaviour: Evidence from adult smoking in Canadian Aboriginal communities," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(5), pages 1661-1693, December.
  • Handle: RePEc:wly:canjec:v:48:y:2015:i:5:p:1661-1693
    DOI: 10.1111/caje.12176
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    Cited by:

    1. Anindya Sen, 2017. "Smokes, Smugglers and Lost Tax Revenues: How Governments Should Respond," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 471, February.

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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