The Influence of Geography and Measurement in Estimating Cigarette Price Responsiveness

Michael Pesko, John Tauras, Jidong Huang and Frank Chaloupka

No 22296, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use data from the Tobacco Use Supplements to the Current Population Survey from 2006-2015 to calculate cigarette price elasticities of demand using four alternative cigarette tax/price measures that compensate for the local tax environment to various extents. We use both state-level prices and local-level prices from 386 sub-state areas of the United States. We estimate a price elasticity of total demand of -0.38 using the price measure most strongly compensating for the local tax environment, and significantly lower elasticities for other popular cigarette price measures. We also find greater price responsiveness for adults that are younger, higher income, and higher educated.

JEL-codes: I12 I18 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-hea and nep-ure
Note: EH
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Citations: View citations in EconPapers (7)

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