Are cigarette bans really good economic policy?
- 1 September 2001
- journal article
- research article
- Published by Taylor & Francis in Applied Economics
- Vol. 33 (11) , 1365-1368
- https://doi.org/10.1080/00036840010007489
Abstract
This study investigates the quarterly relationship between the quantity of cigarettes sold, real disposable income per capita, and the relative price level of cigarettes in Canada. Careful attention is paid to the nonstationarity of the data and the dynamic specification of the model. It is concluded that cigarette demand is extremely insensitive to price and income changes. This is evidence of the large consumer surplus smokers enjoy and the large revenue increasing potential of a cigarette tax increase policy, as opposed to cigarette bans.Keywords
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