Quality and quantity of price elasticity of cigarette in Iran.
- Publisher:
- WILEY
- Publication Type:
- Journal Article
- Citation:
- The International journal of health planning and management, 2021, 36, (1), pp. 60-70
- Issue Date:
- 2021-01
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hpm.3062.pdf | Published version | 397.76 kB |
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Objective
Effectiveness of tax policies to control cigarette consumption largely depends on the sensitivity of cigarette demand due to price change. Price elasticity is the measurement of this responsiveness. The main objective of this study is to measure quantity, and quality price elasticity of demand (PED) and cross-price elasticity of demand (XED) for Iranian and non-Iranian cigarette brands in Iran.Methods
This study used data from the 2017 Iranian household income and expenditures survey conducted in all 31 provinces of Iran. A total of 39,864 households were included in the survey. PED of quantity and quality and XED were estimated using restricted, unrestricted and quintile regression models.Results
Our results s show that the Iranian and non-Iranians brands cigarettes were price inelastic and elastic, respectively. XED between Iranian and non-Iranian brands was positive suggesting households' preference for Iranian brands of cigarettes over non-Iranian brands. Quintile regression results suggest that PED varied between -1.20 and -0.91 across the distribution of quantity demanded.Conclusion
Imposing tax could be a useful policy tool to control smoking initiation and intensity in Iran. However, the effectiveness of such policy would depend on the better governance of taxation imposed on different brands of cigarettes.Please use this identifier to cite or link to this item: