Price Elasticity Estimates of Cigarette Demand in Vietnam

Patrick Eozenou () and Burke Fishburn

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we analyze a complete demand system to estimate the price elasticity for cigarette demand in Vietnam. Following Deaton (1990), we build a spatial panel using cross sectional household survey data. We consider a model of simultaneous choice of quantity and quality. This allows us to exploit unit values from cigarette consumption in order to disentangle quality choice from exogenous price variations. We then rely on spatial variations in prices and quantities demanded to estimate an Almost Ideal Demand System. The estimated price elasticity for cigarette demand is centered around -0.53, which is in line with previous empirical studies for developing countries.

Keywords: Price elasticity; Cigarette Demand; Taxation; Consumption; Vietnam (search for similar items in EconPapers)
JEL-codes: D12 H23 H31 I12 (search for similar items in EconPapers)
Date: 2001-09, Revised 2007-11
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Related works:
Working Paper: Price Elasticity Estimates for Cigarette Demand in Vietnam (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:12779

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