The Interdependence of Cigarette and Liquor Demand
Posted: 24 Sep 2014
Date Written: 1995
This research makes at least two contributions to the literature focusing on demand for liquor and cigarettes. First, we establish empirically whether these goods are substitutes or complements in consumption. Second, results from our analysis permit answers to questions about whether states should consider setting or changing tax rates on cigarettes and liquor as a joint decision to maximize tax revenues.
Keywords: cigarettes, liquor, substitution, complementarity, United States
JEL Classification: D12
Suggested Citation: Suggested Citation