Quasi-Experimental Price Elasticities of Cigarette Demand and the Bootlegging Effect

American Journal of Agricultural Economics, Vol. 69, No. 4, pp. 750-754, 1987

Posted: 24 Sep 2014 Last revised: 5 Apr 2016

See all articles by Badi H. Baltagi

Badi H. Baltagi

Syracuse University - Maxwell School of Citizenship and Public Affairs; IZA Institute of Labor Economics; Syracuse University - Center for Policy Research

Rajeev K. Goel

Illinois State University - Department of Economics

Date Written: 1987

Abstract

This paper updates the Lyon and Simon quasi-experimental price elasticities of cigarette demand and studies their sensitivity to changes in the cigarette market over time as well as their sensitivity to the effects of bootlegging. The results indicate a downward trend in these elasticities over time and an upward bias for states where bootlegging exists. However, once the comparison group is modified to include bootlegging-free states only, this difference over time and across groups becomes statistically insignificant.

Keywords: bootlegging, cigarette demand, price elasticities, quasi-experimental method

JEL Classification: I10, D12

Suggested Citation

Baltagi, Badi H. and Goel, Rajeev K., Quasi-Experimental Price Elasticities of Cigarette Demand and the Bootlegging Effect (1987). American Journal of Agricultural Economics, Vol. 69, No. 4, pp. 750-754, 1987. Available at SSRN: https://ssrn.com/abstract=2500414

Badi H. Baltagi

Syracuse University - Maxwell School of Citizenship and Public Affairs ( email )

400 Eggers Hall
Syracuse, NY 13244
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States
315-443-1630 (Phone)
315-443-1081 (Fax)

HOME PAGE: http://www.maxwell.syr.edu/cpr_about.aspx?id=6442451316

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

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