Demand for cigarettes in the United States: effects of prices in bordering states and contiguity with Mexico and CanadaRichard Connelly, Rajeev K. Goel and Rati Ram Applied Economics, 2009, vol. 41, issue 18, pages 2255-2260 Abstract: Based on a cross-section of US states for 2004, this article estimates a demand function for cigarettes after including a proxy for prices in the bordering states and simple proxies for contiguity with Mexico and Canada and for being a major tobacco producer. One major point seems to be that the negative elasticity for within-state price is similar in magnitude to the positive elasticity for the (lowest) price in bordering states. Several additional points also seem noteworthy. First, having a border with Mexico lowers sales in the state sizably. Second, the share of Hispanic/Latino population in the state also lowers sales significantly. Third, contiguity with Canada appears to have no significant effect. Fourth, partial impact of the state being a major tobacco producer appears minor even though consumption in these states is considerably higher. Fifth, education shows the expected negative association with cigarette consumption, but its statistical significance is low. Last, income carries a weak negative parameter, perhaps reflecting the lower prevalence of smoking in higher-income households. Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:taf:applec:v:41:y:2009:i:18:p:2255-2260 Ordering information: This journal article can be ordered from Access Statistics for this article Applied Economics is edited by Mark Taylor More articles in Applied Economics from Taylor and Francis Journals |
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