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The Demand for Tobacco in Post-Unification Italy

Author

Listed:
  • Carlo Ciccarelli

    () (University of Rome "Tor Vergata")

  • Gianni De Fraja

    () (Nottingham School of Economics)

Abstract

This paper studies the demand for tobacco products in post-unification Italy. We construct a very detailed panel dataset of annual consumption in the 69 Italian provinces from 1871 to 1913, which is then used to estimate the demand for tobacco products. We find support for the Becker and Murphy (1988) rational addiction model. We also find that, in the period considered, tobacco was a normal good in Italy: aggregate tobacco consumption increased with income. Subsequently, we consider separately the four types of products which comprise aggregate tobacco (fine-cut tobacco, snuff, cigars, and cigarettes), and tentatively suggest that habit formation was a stronger factor in the persistence of consumption than physical addiction. The paper ends by showing that the introduction of the Bonsack cigarette rolling machine in the early 1890s did not coincide with changes in the structure of the demand for tobacco, suggesting cost-driven technological change.

Suggested Citation

  • Carlo Ciccarelli & Gianni De Fraja, 2014. "The Demand for Tobacco in Post-Unification Italy," Quaderni di storia economica (Economic History Working Papers) 31, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:workqs:qse_31
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    Citations

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    Cited by:

    1. Ciccarelli, Carlo & Missiaia, Anna, 2014. "Business fluctuations in Imperial Austria's regions, 1867-1913: new evidence," LSE Research Online Documents on Economics 55963, London School of Economics and Political Science, LSE Library.
    2. Carlo Ciccarelli & Pierpaolo Pierani & Silvia Tiezzi, 2014. "Secular trends in tobacco consumption: the case of Italy, 1871-2010," Department of Economics University of Siena 700, Department of Economics, University of Siena.
    3. Carlo Ciccarelli & Jean Paul Elhorst, 2016. "A Spatial Diffusion Model with Common Factors and an Application to Cigarette Consumption," CEIS Research Paper 381, Tor Vergata University, CEIS, revised 31 May 2016.
    4. Francesco Giffoni & Matteo Gomellini, 2015. "Brain gain in the age of mass migration," Quaderni di storia economica (Economic History Working Papers) 34, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    smoking; Italian Kingdom; rational addiction; panel data;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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