IDEAS home Printed from https://ideas.repec.org/p/dpc/wpaper/0509.html
   My bibliography  Save this paper

Price Elasticity Estimates for Cigarette Demand in Vietnam

Author

Listed:
  • Patrick Eozenou

    (European University Institute, Villa San Paolo, Via Della Piazzuola 43, 50133 Florence, Italy)

  • Burke Fishburn

    (World Health Organization and Center for Disease Control.)

Abstract

In this paper, we analyze a complete demand system to estimate the price elasticity for cigarette demand in Vietnam. Following Deaton (1990), we build a spatial panel using cross sectional household survey data. We consider a model of simultaneous choice of quantity and quality. This allows us to exploit unit values from cigarette consumption in order to disentangle quality choice from exogenous price variations. We then rely on spatial variations in prices and quantities demanded to estimate an Almost Ideal Demand System. The estimated price elasticity for cigarette demand is centered around -0.53, which is in line with previous empirical studies for developing countries.

Suggested Citation

  • Patrick Eozenou & Burke Fishburn, 2009. "Price Elasticity Estimates for Cigarette Demand in Vietnam," Working Papers 05, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:0509
    as

    Download full text from publisher

    File URL: http://depocenwp.org/modules/download/index.php?id=57
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jha, Prabhat & Chaloupka, Frank (ed.), 2000. "Tobacco Control in Developing Countries," OUP Catalogue, Oxford University Press, number 9780192632463.
    2. Angus Deaton, 1991. "Price Elasticities from Survey Data: Extensions and Indonesian Results," International Economic Association Series, in: Marc Nerlove (ed.), Issues in Contemporary Economics, chapter 10, pages 253-283, Palgrave Macmillan.
    3. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-383, June.
    4. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    5. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    6. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. G. Guindon, 2014. "The impact of tobacco prices on smoking onset in Vietnam: duration analyses of retrospective data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(1), pages 19-39, January.
    2. Enayatollah Homaie Rad & Mohammad Habibullah Pulok & Satar Rezaei & Anita Reihanian, 2021. "Quality and quantity of price elasticity of cigarette in Iran," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(1), pages 60-70, January.
    3. Salti, Nisreen & Brouwer, Elizabeth & Verguet, Stéphane, 2016. "The health, financial and distributional consequences of increases in the tobacco excise tax among smokers in Lebanon," Social Science & Medicine, Elsevier, vol. 170(C), pages 161-169.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McKelvey, Christopher, 2011. "Price, unit value, and quality demanded," Journal of Development Economics, Elsevier, vol. 95(2), pages 157-169, July.
    2. Pangaribowo, Evita Hanie & Tsegai, Daniel W., 2011. "Food Demand Analysis of Indonesian Households with Particular Attention to the Poorest," Discussion Papers 116748, University of Bonn, Center for Development Research (ZEF).
    3. Surabhi Mittal, 2006. "Structural Shift in Demand for Food: Projections for 2020," Indian Council for Research on International Economic Relations, New Delhi Working Papers 184, Indian Council for Research on International Economic Relations, New Delhi, India.
    4. repec:pru:wpaper:30 is not listed on IDEAS
    5. Bairagi, Subir & Mohanty, Samarendu & Baruah, Sampriti & Trinh Thi, Huong, 2020. "Changing food consumption patterns in rural and urban Vietnam: Implications for a future food supply system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.
    6. Xavier Irz, 2010. "Modeling physical quantities of food and nutrients consumed from aggregate data—with an application to Finland," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 293-304, May.
    7. Subir Bairagi & Samarendu Mohanty & Sampriti Baruah & Huong Trinh Thi, 2020. "Changing food consumption patterns in rural and urban Vietnam: Implications for a future food supply system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 750-775, July.
    8. Aida Gjika & Edvin Zhllima & Klodjan Rama & Drini Imami, 2020. "Analysis of Tobacco Price Elasticity in Albania Using Household Level Data," IJERPH, MDPI, vol. 17(2), pages 1-11, January.
    9. Gibson, John & Kim, Bonggeun, 2013. "Quality, Quantity, and Nutritional Impacts of Rice Price Changes in Vietnam," World Development, Elsevier, vol. 43(C), pages 329-340.
    10. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    11. Keuzenkamp, Hugo A. & Barten, Anton P., 1995. "Rejection without falsification on the history of testing the homogeneity condition in the theory of consumer demand," Journal of Econometrics, Elsevier, vol. 67(1), pages 103-127, May.
    12. Vittorio Nicolardi, 2009. "The effects of the new 1995 ESA methodologies of estimation on the structural analysis of Italian consumption," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 18(1), pages 125-149, March.
    13. Barnett, William A. & Serletis, Apostolos, 2008. "The Differential Approach to Demand Analysis and the Rotterdam Model," MPRA Paper 12319, University Library of Munich, Germany.
    14. Yu, Wusheng & Hertel, Thomas W. & Preckel, Paul V. & Eales, James S., 2004. "Projecting world food demand using alternative demand systems," Economic Modelling, Elsevier, vol. 21(1), pages 99-129, January.
    15. Thanagopal, Dr. Thannaletchimy & Housset, Félix, 2017. "A quality-adjusted AIDS model in the study of French imports," International Economics, Elsevier, vol. 151(C), pages 85-99.
    16. Korir, Lilian & Rizov, Marian & Ruto, Eric, 2020. "Food security in Kenya: Insights from a household food demand model," Economic Modelling, Elsevier, vol. 92(C), pages 99-108.
    17. Germán Coloma, 2019. "The Effect of Horizontal Mergers on Efficiency and Market Power: An Application to the Argentine Hamburger Market," CEMA Working Papers: Serie Documentos de Trabajo. 705, Universidad del CEMA.
    18. Rulon D. Pope & Jeffrey T. LaFrance & Timothy K. M.Beatty, 2004. "Building Gorman's Nest," Econometric Society 2004 Australasian Meetings 26, Econometric Society.
    19. Agénor Lahatte, 2010. "Autocorrélation spatiale et modèle de demande traitant des valeurs unitaires," Économie et Prévision, Programme National Persée, vol. 193(2), pages 101-117.
    20. Frank T. Denton & Dean C. Mountain, 2016. "Biases in consumer elasticities based on micro and aggregate data: an integrated framework and empirical evaluation," Empirical Economics, Springer, vol. 50(2), pages 531-560, March.
    21. Paula Carvalho Pereda & Denisard Cneio de Oliveira Alves, 2008. "Demand for Nutrients in Brazil," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807211136590, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    Price elasticity; Cigarette Demand; Taxation; Consumption; Vietnam.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dpc:wpaper:0509. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Doan Quang Hung (email available below). General contact details of provider: https://edirc.repec.org/data/depocvn.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.