IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v17y1999i2p223-234.html
   My bibliography  Save this article

The Demand For Cigarettes In Taiwan: Domestic Versus Imported Cigarettes

Author

Listed:
  • CHEE‐RUEY HSIEH
  • TEH‐WEI HU
  • CHIEN‐FU JEFF LIN

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)

Suggested Citation

  • Chee‐Ruey Hsieh & Teh‐Wei Hu & Chien‐Fu Jeff Lin, 1999. "The Demand For Cigarettes In Taiwan: Domestic Versus Imported Cigarettes," Contemporary Economic Policy, Western Economic Association International, vol. 17(2), pages 223-234, April.
    • Handle: RePEc:bla:coecpo:v:17:y:1999:i:2:p:223-234
    DOI: 10.1111/j.1465-7287.1999.tb00677.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.1999.tb00677.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7287.1999.tb00677.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Schneider, Lynne & Klein, Benjamin & Murphy, Kevin M, 1981. "Governmental Regulation of Cigarette Health Information," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 575-612, December.
    2. Baltagi, Badi H & Levin, Dan, 1986. "Estimating Dynamic Demand for Cigarettes Using Panel Data: The Effects of Bootlegging, Taxation and Advertising Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 148-155, February.
    3. Hu, Teh-Wei & Sung, Hai-Yen & Keeler, Theodore E, 1995. "The State Antismoking Campaign and the Industry Response: The Effects of Advertising on Cigarette Consumption in California," American Economic Review, American Economic Association, vol. 85(2), pages 85-90, May.
    4. Kim Haden, 1990. "The Demand for Cigarettes in Japan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 446-450.
    5. Gilbert, Christopher L, 1986. "Professor Hendry's Econometric Methodology," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 283-307, August.
    6. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    7. Hsieh, Chee-Ruey & Yen, Lee-Lan & Liu, Jin-Tan & Chyongchiou Jeng Lin, 1996. "Smoking, health knowledge, and anti-smoking campaigns: An empirical study in Taiwan," Journal of Health Economics, Elsevier, vol. 15(1), pages 87-104, February.
    8. Hamilton, James L, 1972. "The Demand for Cigarettes: Advertising, the Health Scare, and the Cigarette Advertising Ban," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 401-411, November.
    9. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    10. Keeler, Theodore E. & Hu, Teh-Wei & Barnett, Paul G. & Manning, Williard G., 1993. "Taxation, regulation, and addiction: A demand function for cigarettes based on time-series evidence," Journal of Health Economics, Elsevier, vol. 12(1), pages 1-18, April.
    11. Wickens, Michael R., 1996. "Interpreting cointegrating vectors and common stochastic trends," Journal of Econometrics, Elsevier, vol. 74(2), pages 255-271, October.
    12. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    13. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    14. Frank J. Chaloupka & Adit Laixuthai, 1996. "U.S. Trade Policy and Cigarette Smoking in Asia," NBER Working Papers 5543, National Bureau of Economic Research, Inc.
    15. Perron, Pierre & Vogelsang, Timothy J, 1992. "Nonstationarity and Level Shifts with an Application to Purchasing Power Parity," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 301-320, July.
    16. Cheng Hsiao, 1997. "Cointegration and Dynamic Simultaneous Equations Model," Econometrica, Econometric Society, vol. 65(3), pages 647-670, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Budi Hidayat & Hasbullah Thabrany, 2010. "Cigarette Smoking in Indonesia: Examination of a Myopic Model of Addictive Behaviour," IJERPH, MDPI, vol. 7(6), pages 1-13, June.
    2. Tingum, Ernest Ngeh & Parrott, Steve, 2018. "Estimating the Demand for Domestic and Imported Cigarettes in Rwanda," MPRA Paper 88131, University Library of Munich, Germany.
    3. Galinato, Gregmar I. & Olanie, Aaron Z. & Yoder, Jonathan K., 2017. "The Trade and Health Effects of Tobacco Regulations," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(3), September.
    4. Hu, Teh-Wei & Mao, Zhengzhong, 2002. "ECONOMIC ANALYSIS OF TOBACCO AND OPTIONS FOR TOBACCO CONTROL: China Case Study," University of California at San Francisco, Center for Tobacco Control Research and Education qt5x2015sv, Center for Tobacco Control Research and Education, UC San Francisco.
    5. Hidayat, Budi & Thabrany, Hasbullah, 2010. "Cigarette smoking in Indonesia: examination of a myopic model of addictive behaviour," MPRA Paper 30194, University Library of Munich, Germany, revised 17 May 2010.
    6. Songjune Kim & Barry J. Seldon, 2004. "The Demand for Cigarettes in the Republic of Korea and Implications for Government Policy to Lower Cigarette Consumption," Contemporary Economic Policy, Western Economic Association International, vol. 22(2), pages 299-308, April.
    7. Abdulbaki Bilgic & Wojciech Florkowski & Cuma Akbay, 2010. "Demand for cigarettes in Turkey: an application of count data models," Empirical Economics, Springer, vol. 39(3), pages 733-765, December.
    8. Lin, Tsui-Fang, 2008. "Modifiable health risk factors and medical expenditures - The case of Taiwan," Social Science & Medicine, Elsevier, vol. 67(11), pages 1727-1736, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zbw:rwirep:0064 is not listed on IDEAS
    2. Göhlmann, Silja & Schmidt, Christoph M., 2008. "Smoking in Germany: Stylized Facts, Behavioral Models, and Health Policy," Ruhr Economic Papers 64, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Silja Göhlmann & Christoph M. Schmidt, 2008. "Smoking in Germany: Stylized Facts, Behavioral Models, and Health Policy," Ruhr Economic Papers 0064, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    4. Massimo Motta, 2013. "Advertising bans," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 61-81, March.
    5. Fenn, Aju J. & Antonovitz, Frances, 1998. "The Impact Of Addiction Information On Cigarette Consumption," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20857, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Isao Yorozu & Yimin Zhou, 2002. "The Demand For Cigarettes In Japan: Impact Of Information Dissemination On Cigarette Consumption," Contemporary Economic Policy, Western Economic Association International, vol. 20(1), pages 72-82, January.
    7. Natsuko Iwasaki & Carol Horton Tremblay & Victor J. Tremblay, 2006. "Advertising Restrictions And Cigarette Smoking: Evidence From Myopic And Rational Addiction Models," Contemporary Economic Policy, Western Economic Association International, vol. 24(3), pages 370-381, July.
    8. Andrew M. Jones & Audrey Laporte & Nigel Rice & Eugenio Zucchelli, 2019. "Dynamic panel data estimation of an integrated Grossman and Becker–Murphy model of health and addiction," Empirical Economics, Springer, vol. 56(2), pages 703-733, February.
    9. Göhlmann, Silja, 2007. "Who Smokes and How Much? - Empirical Evidence for Germany," Ruhr Economic Papers 26, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Junmin Wan, 2004. "Consumption of Cigarettes, Nicotine, and Tar under Anti-smoking Policies: Japan as a Case Study," Discussion Papers in Economics and Business 04-12-Rev, Osaka University, Graduate School of Economics, revised Mar 2006.
    11. Silvia TIEZZI, 2010. "Addiction and Smoking Behaviour in Italy," EcoMod2004 330600141, EcoMod.
    12. Jones, A. M. & Laporte, A. & Rice, N. & Zucchelli, E., 2014. "A synthesis of the Grossman and Becker-Murphy models of health and addiction: theoretical and empirical implications," Health, Econometrics and Data Group (HEDG) Working Papers 14/07, HEDG, c/o Department of Economics, University of York.
    13. Kan, Kamhon, 2007. "Cigarette smoking and self-control," Journal of Health Economics, Elsevier, vol. 26(1), pages 61-81, January.
    14. Silja Göhlmann, 2007. "Who Smokes and How Much? - Empirical Evidence for Germany," Ruhr Economic Papers 0026, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    15. Bünger Björn & Prinz Aloys, 2010. "Staatliche Glücksförderung? Karl Popper, Richard Layard und das Rauchen / Should public policy pursue happiness? Karl Popper, Richard Layard and smoking," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 61(1), pages 169-190, January.
    16. Silvia Tiezzi, 2005. "An empirical analysis of tobacco addiction in Italy," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(3), pages 233-243, September.
    17. Hai-Yen Sung & Teh- Wei Hu & Theodore E. Keeler, 1994. "A Dynamic Simultaneous-Equations Model for Cigarette Consumption in the Western States," Public Economics 9403002, University Library of Munich, Germany, revised 04 Apr 1994.
    18. repec:zbw:rwirep:0026 is not listed on IDEAS
    19. Rajeev K. Goel & Michael A. Nelson, 2006. "The Effectiveness of Anti‐Smoking Legislation: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 325-355, July.
    20. Hammar, Henrik & Carlsson, Fredrik, 2001. "Smokers' Decisions To Quit Smoking," Working Papers in Economics 59, University of Gothenburg, Department of Economics.
    21. Ida, Takanori & Goto, Rei & Takahashi, Yuko & Nishimura, Shuzo, 2011. "Can economic-psychological parameters predict successful smoking cessation?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(3), pages 285-295, May.
    22. Nikolay Gospodinov & Ian Irvine, 2005. "A ‘long march’ perspective on tobacco use in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(2), pages 366-393, May.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:17:y:1999:i:2:p:223-234. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.