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The Demand for Nicotine Replacement Therapies

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  • John A. Tauras
  • Frank J. Chaloupka

Abstract

This paper is the first econometric study to examine the determinants of nicotine replacement therapy (NRT) demand. Pooled cross-sectional time-series scanner-based data for 50 major metropolitan markets in the United States covering the period between the second quarter 1996 and the third quarter 1999 are used in the analysis. Fixed-effects modeling is employed to assess the impact of NRT prices, cigarette prices, and other determinants on NRT demand. The estimates indicate that decreases in the price of NRT and increases in the price of cigarettes would lead to substantial increases in per-capita sales of NRT products. The average own-price elasticity of demand for Nicoderm CQ, Nicorette, and Nicotrol is -1.4, -1.5, and -1.1 respectively. The average cross-price elasticity of demand for Nicoderm CQ and Nicorette is 0.68 and 0.81 respectively.

Suggested Citation

  • John A. Tauras & Frank J. Chaloupka, 2001. "The Demand for Nicotine Replacement Therapies," NBER Working Papers 8332, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8332
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    References listed on IDEAS

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    1. Martin Forster & Andrew M. Jones, "undated". "The role of tobacco taxes in starting and quitting smoking," Discussion Papers 00/51, Department of Economics, University of York.
    2. John A. Tauras & Frank J. Chaloupka, 1999. "Determinants of Smoking Cessation: An Analysis of Young Adult Men and Women," NBER Working Papers 7262, National Bureau of Economic Research, Inc.
    3. John A. Tauras, 1999. "The Transition to Smoking Cessation: Evidence from Multiple Failure Duration Analysis," NBER Working Papers 7412, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Hammar, Henrik & Carlsson, Fredrik, 2001. "Smokers' Decisions To Quit Smoking," Working Papers in Economics 59, University of Gothenburg, Department of Economics.
    2. Robert W. Paterson & Kevin J. Boyle & Christopher F. Parmeter & James E. Neumann & Paul De Civita, 2008. "Heterogeneity in preferences for smoking cessation," Health Economics, John Wiley & Sons, Ltd., vol. 17(12), pages 1363-1377, December.
    3. Joachim Marti, 2012. "Assessing preferences for improved smoking cessation medications: a discrete choice experiment," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(5), pages 533-548, October.
    4. Seiritsu Ogura & Wataru Suzuki & Makoto Kawamura & Tamotsu Kadoda, 2006. "Conjoint Analysis to Estimate the Demand for Nicotine Replacement Therapy in Japan," NBER Chapters, in: Health Care Issues in the United States and Japan, pages 229-246, National Bureau of Economic Research, Inc.
    5. Henrik Hammar & Fredrik Carlsson, 2005. "Smokers' expectations to quit smoking," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 257-267, March.
    6. Rosemary Avery & Donald Kenkel & Dean Lillard & Alan Mathios, 2007. "Regulating advertisements: the case of smoking cessation products," Journal of Regulatory Economics, Springer, vol. 31(2), pages 185-208, April.
    7. Werfel, Seth H. & Jaffe, Adam B., 2013. "Induced innovation and technology trajectory: Evidence from smoking cessation products," Research Policy, Elsevier, vol. 42(1), pages 15-22.
    8. Frank Chaloupka & John Tauras, 2004. "The impact of nicotine replacement therapies on cigarette demand," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 28(3), pages 395-403, September.
    9. Rajeev Goel & Michael Nelson, 2004. "International patterns of cigarette smoking and global antismoking policies," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 28(3), pages 382-394, September.
    10. Hernandez-Vasquez, Akram, 2016. "Burden of smoking-related disease and potential impact of cigarette price increase in Peru," MPRA Paper 75677, University Library of Munich, Germany.
    11. Rajeev Goel, 2004. "New developments in tobacco research: An introduction," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 28(3), pages 379-381, September.

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    • I1 - Health, Education, and Welfare - - Health

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