engleski

Elasticity of Tobacco Products – Time Series Analysis

Tobacco use has devastating global impact on health and economic prosperity. Although global smoking rate decreased in the past 30 years, especially in high-income countries, many smokers in low- and middle- income countries do not have access to education, prevention or assistance. Even though many factors influence the final price of cigarettes, the most important policy- related determinants of cigarette prices are taxes. Measuring the responsiveness of tobacco demand to the changes in the price of cigarettes and income has been of a great interest to researchers, policy makers, industry specialists etc. A large number of studies provide consistent evidence that higher tobacco prices lead to significant reductions in cigarette smoking. Having an estimated cigarette price elasticity of demand for a specific country is very useful for planning purposes and it enables precise estimation of how much tobacco tax increase will affect government revenues and tobacco use. Although there are many studies on this topic globally, there is no similar research for Croatia. The aim of this study is to assess the responsiveness of Croatians to a change in cigarette prices. In this study, we estimate price and income elasticities of cigarette demand in Croatia using aggregate time-series data from 2000 to 2017. Autoregressive Distributed Lag (ARDL) cointegration framework is used to examine the short-run and long-run characteristics of cigarettes demand in Croatia.

elasticity, tobacco products, demand model

nije evidentirano