The Influence of Geography and Measurement in Estimating Cigarette Price Responsiveness

36 Pages Posted: 7 Jun 2016 Last revised: 4 Jun 2021

See all articles by Michael Pesko

Michael Pesko

Georgia State University - Department of Economics

John A. Tauras

University of Illinois at Chicago - Department of Economics; National Bureau of Economic Research (NBER)

Jidong Huang

School of Public Health, Georgia State University

Frank J. Chaloupka

University of Illinois at Chicago - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2016

Abstract

We use data from the Tobacco Use Supplements to the Current Population Survey from 2006-2015 to calculate cigarette price elasticities of demand using four alternative cigarette tax/price measures that compensate for the local tax environment to various extents. We use both state-level prices and local-level prices from 386 sub-state areas of the United States. We estimate a price elasticity of total demand of -0.38 using the price measure most strongly compensating for the local tax environment, and significantly lower elasticities for other popular cigarette price measures. We also find greater price responsiveness for adults that are younger, higher income, and higher educated.

Suggested Citation

Pesko, Michael and Tauras, John A. and Huang, Jidong and Chaloupka, Frank J., The Influence of Geography and Measurement in Estimating Cigarette Price Responsiveness (June 2016). NBER Working Paper No. w22296, Available at SSRN: https://ssrn.com/abstract=2790693

Michael Pesko (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

John A. Tauras

University of Illinois at Chicago - Department of Economics ( email )

725 University Hall (UH)
Chicago, IL 60607-7121
United States
312-996-2683 (Phone)
312-996-3344 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jidong Huang

School of Public Health, Georgia State University ( email )

140 Decatur Street
Urban Life Building
Atlanta, GA 30303
United States

Frank J. Chaloupka

University of Illinois at Chicago - Department of Economics ( email )

m/c 144 601 South Morgan St., Room 2103
Chicago, IL 60607-7121
United States
312-413-2367 (Phone)
312-996-3344 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
9
Abstract Views
255
PlumX Metrics