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Patrick Eozenou, Burke Fishburn, 2009. "Price Elasticity Estimates for Cigarette Demand in Vietnam"
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| Abstract: |
| In this paper, we analyze a complete demand system to estimate the price elasticity for cigarette demand in
Vietnam. Following Deaton (1990), we build a spatial panel using cross sectional household survey data. We
consider a model of simultaneous choice of quantity and quality. This allows us to exploit unit values from
cigarette consumption in order to disentangle quality choice from exogenous price variations. We then rely on
spatial variations in prices and quantities demanded to estimate an Almost Ideal Demand System. The estimated
price elasticity for cigarette demand is centered around -0.53, which is in line with previous empirical studies for
developing countries. |
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