Substitutability for Farm Commodities: The Demand for U.S. Tobacco in Cigarette Manufacturing

Daniel Sumner and Julian Alston

American Journal of Agricultural Economics, 1987, vol. 69, issue 2, 258-265

Abstract: A generalized leontief cost function and system of factor demand functions for the domestic cigarette industry is estimated. We strongly rejected fixed proportions. Both imported tobacco and other inputs are substitutes for U.S. tobacco. The estimated (output constant) price elasticities are combined with the output effect (calculated from cost shares and time-series estimates of the cigarette demand elasticity) and an export demand elasticity (from previous studies) to consider the effects of reducing the U.S. price support. Competition from foreign tobacco implies that a U.S. price decline would increase significantly the quantity of U.S. tobacco demanded.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.2307/1242275 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:69:y:1987:i:2:p:258-265.

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().