Price Elasticity Estimates for Tobacco and Other Addictive Goods in India
The tax base of tobacco in India is found to be heavily depended on about fteen per cent of the tobacco users who represent cigarettes smokers. Non-cigarette tobacco products used by the majority of tobacco users are largely out of the tax net. Analysis of the price elasticity of various tobacco products would bring out the potential of tax as an instrument to control tobacco use of any kind. In this context, this paper examines how the demand for a variety of tobacco products and addictive goods such as pan and alcohol respond to changes in prices. [IGIDR WP 2005-003].
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