THE DEMAND FOR CIGARETTES IN TAIWAN: DOMESTIC VERSUS IMPORTED CIGARETTES |
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| Authors: | CHEE-RUEY HSIEH TEH-WEI HU CHIEN-FU JEFF LIN |
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| Institution: | Research Fellow, The Institute of Economics, Academia Sinica, Taipei, Taiwan, Phone 886-2-27822791-207, Fax 886-2-27853946 E-mail;Professor of Health Economics, School of Public Health, University of California, Berkeley, Calif, Phone 1–510-643-6298, Fax 1–510-643-6981 E-mail;Professor of Economics, Department of Economics, National Taiwan University, Taipei, Taiwan Phone 886-2-23519641-521, Fax 886-2-23215704 E-mail |
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| Abstract: | This paper uses annual time series data from Taiwan to empirically estimate the demand for cigarettes, in consideration of the import liberation of foreign cigarettes and of antismoking campaigns. The results indicate that the price elasticities for domestic and imported cigarettes are -0.6 and-1.1, respectively. The cross-price elasticities are 0.08 for domestic and 2.78 for imported cigarettes. The spread of cigarette health information has had a significantly negative effect on cigarette consumption. In addition, this study offers mild support to the argument that opening the market to imported cigarettes has resulted in significant increases in overall cigarette consumption. (JEL D12, 118) |
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