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Prices and Cigarette Demand: Evidence from Youth Tobacco Use in Developing Countries

  • Deliana Kostova
  • Hana Ross
  • Evan Blecher
  • Sara Markowitz

This paper estimates the impact of cigarette prices on youth smoking in lower-income countries using data from the Global Youth Tobacco Survey (GYTS). Country-level heterogeneity is addressed with fixed effects and by directly controlling for confounding environmental factors such as local anti-smoking sentiment, cigarette advertising, anti-smoking media messages, and compliance with youth access restrictions. We find that cigarette price is an important determinant of both smoking participation and conditional demand. The estimated price elasticity of participation is -0.63. The likelihood of participation decreases with anti-smoking sentiment and increases with exposure to cigarette advertising. The estimated price elasticity of conditional cigarette demand is approximately -1.2. Neither anti-smoking sentiment, cigarette advertising, nor access restrictions have an impact on the intensity of smoking among current smokers, but exposure to anti-smoking media may reduce the number of cigarettes smoked.

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File URL: http://www.nber.org/papers/w15781.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15781.

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Date of creation: Feb 2010
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Publication status: published as Deliana Kostova, Hana Ross , Evan Blecher, and Sara Markowitz. Is youth smoking responsive to cigarette prices? Evidence from low - and middle - income countries . Tobacco Control 2011; 20 : 419 - 424
Handle: RePEc:nbr:nberwo:15781
Note: CH HE
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  1. Lewit, Eugene M & Coate, Douglas & Grossman, Michael, 1981. "The Effects of Government Regulation on Teenage Smoking," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 545-69, December.
  2. Carpenter, Christopher & Cook, Philip J., 2008. "Cigarette taxes and youth smoking: New evidence from national, state, and local Youth Risk Behavior Surveys," Journal of Health Economics, Elsevier, vol. 27(2), pages 287-299, March.
  3. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc.
  4. John Mullahy, 1998. "Much Ado About Two: Reconsidering Retransformation and the Two-Part Model in Health Economics," NBER Technical Working Papers 0228, National Bureau of Economic Research, Inc.
  5. Hana Ross & Frank J. Chaloupka, 2003. "The effect of cigarette prices on youth smoking," Health Economics, John Wiley & Sons, Ltd., vol. 12(3), pages 217-230.
  6. John A. Tauras, 2005. "An Empirical Analysis of Adult Cigarette Demand," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 361-375, Summer.
  7. Philip DeCicca & Donald Kenkel & Alan Mathios, 2002. "Putting Out the Fires: Will Higher Taxes Reduce the Onset of Youth Smoking?," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 144-169, February.
  8. Frank J. Chaloupka & Henry Wechsler, 1995. "Price, Tobacco Control Policies and Smoking Among Young Adults," NBER Working Papers 5012, National Bureau of Economic Research, Inc.
  9. Mullahy, John, 1998. "Much ado about two: reconsidering retransformation and the two-part model in health econometrics," Journal of Health Economics, Elsevier, vol. 17(3), pages 247-281, June.
  10. Philip DeCicca & Donald S. Kenkel & Alan D. Mathios & Yoon-Jeong Shin & Jae-Young Lim, 2006. "Youth Smoking, Cigarette Prices, and Anti-Smoking Sentiment," NBER Working Papers 12458, National Bureau of Economic Research, Inc.
  11. Lance, Peter M. & Akin, John S. & Dow, William H. & Loh, Chung-Ping, 2004. "Is cigarette smoking in poorer nations highly sensitive to price?: Evidence from Russia and China," Journal of Health Economics, Elsevier, vol. 23(1), pages 173-189, January.
  12. Jon Nelson, 2003. "Youth smoking prevalence in developing countries: effect of advertising bans," Applied Economics Letters, Taylor & Francis Journals, vol. 10(13), pages 805-811.
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