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

Author

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

Abstract

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.

Suggested Citation

  • Deliana Kostova & Hana Ross & Evan Blecher & Sara Markowitz, 2010. "Prices and Cigarette Demand: Evidence from Youth Tobacco Use in Developing Countries," NBER Working Papers 15781, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15781
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    References listed on IDEAS

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    1. 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.
    2. Philip DeCicca & Donald Kenkel & Alan Mathios & Yoon-Jeong Shin & Jae-Young Lim, 2008. "Youth smoking, cigarette prices, and anti-smoking sentiment," Health Economics, John Wiley & Sons, Ltd., vol. 17(6), pages 733-749.
    3. 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.
    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. Chaloupka, Frank J. & Wechsler, Henry, 1997. "Price, tobacco control policies and smoking among young adults," Journal of Health Economics, Elsevier, vol. 16(3), pages 359-373, June.
    6. 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.
    7. 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.
    8. 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.
    9. 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 545-569, December.
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    11. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc.
    12. John A. Tauras, 2005. "An Empirical Analysis of Adult Cigarette Demand," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 361-375, Summer.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Prices and Cigarette Demand
      by Ariel Goldring in Free Market Mojo on 2010-03-17 13:38:49

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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