What Price is Right? Cigarette Demand Has Become More Responsive to Prices.
Published in ARE Update, 2022
Recommended citation: Gafarov, Bulat, Tengda Gong, and Jens Hilscher. 2022. "What Price Is Right? Cigarette Demand Has Become More Responsive to Prices." ARE Update. 25(4): 9-11. University of California Giannini Foundation of Agricultural Economics. /files/pdf/research/price2022.pdf
We provide evidence that demand for cigarettes has become relatively more sensitive to price changes, while other products’ demand has become slightly less responsive. This change happened during a time of high cigarette taxes, increased regulation of smoking, and is particularly pronounced in California.