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Structural Change in Cigarette Demand: Cusum Tests using Panel Data

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  • Schroeter, John R.
  • Fenn, Aju J.

Abstract

We conduct custom tests of structural change in a rational addiction model of cigarette demand estimated using a panel of annual time series of state−level data. In contrast to the one previous application of custom tests to the question of cigarette demand stability, our results provide strong evidence of downward shifts in demand during the modern era of health warnings and anti−smoking campaigns.

Suggested Citation

  • Schroeter, John R. & Fenn, Aju J., 2005. "Structural Change in Cigarette Demand: Cusum Tests using Panel Data," ISU General Staff Papers 200501010800001083, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200501010800001083
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    References listed on IDEAS

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    1. 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.
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    6. 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.
    7. Fenn, Aju J. & Antonovitz, Frances & Schroeter, John R., 2001. "Cigarettes and addiction information: new evidence in support of the rational addiction model," Economics Letters, Elsevier, vol. 72(1), pages 39-45, July.
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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • D1 - Microeconomics - - Household Behavior

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