What Price is Right? Cigarette Demand Has Become More Responsive to Prices

Gafarov, Bulat, Tengda Gong and Jens Hilscher
from ARE Update Vol. 25, No. 4, Mar/Apr, 2022
View Article PDF: What Price is Right? Cigarette Demand Has Become More Responsive to Prices
Abstract
We provide evidence that demand for cigarettes has become relatively more sensitive to price changes, while other products’ demand has become slightly less responsive. This change happened during a time of high cigarette taxes, increased regulation of smoking, and is particularly pronounced in California.
Keywords
demand elasticity, market power, spatial competition, markups
Citation
Gafarov, Bulat, Tengda Gong and Jens Hilscher. 2022. "What Price is Right? Cigarette Demand Has Become More Responsive to Prices." ARE Update 25(4): 9-11. University of California Giannini Foundation of Agricultural Economics.
https://giannini.ucop.edu/filer/file/1650925435/20369/