Are Cigarette Bans Really Good Economic Policy?

Frank Reinhardt (reinhafs@gov.ns.ca) and David Giles

No 9903, Econometrics Working Papers from Department of Economics, University of Victoria

Abstract: We investigate the quarterly relationship between the quantity of cigarettes sold, real disposable income per capita, and the relative price level of cigarettes in Canada. Careful attention is paid to the non-stationarity of the data and the dynamic specification of the model. We conclude that cigarette demand is extremely insensitive to price and income changes. This is evidence of the large consumer surplus smokers enjoy and the large revenue increasing potential of a cigarette tax increase policy, as opposed to cigarette bans.

Keywords: Cigarettes; exise tax; consumer surplus (search for similar items in EconPapers)
JEL-codes: C10 H21 I18 (search for similar items in EconPapers)
Pages: 12 pages
Date: 1999-05-21
New Economics Papers: this item is included in nep-env and nep-hea
Note: ISSN 1485-6441
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Are cigarette bans really good economic policy? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:vic:vicewp:9903

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