Sensitivity of Slovak Demand for Cigarettes to Price Change

In 2015 was 10th anniversary of WHO Framework Convention on Tobacco Control. The effort of decreasing tobacco consumption in the world runs by several methods as cancelation of small package of cigarettes, pubs and restaurants smoking restrictions, health warnings and imagines of diseases caused by smoking, and the most important price increasing by taxation. Therefore the main aim of this paper is estimate price elasticity of demand for cigarettes in Slovakia by applying Heckman sample selection model on Households Budget Survey data for time period 20062012. We also investigate difference in price elasticity between households with light, moderate and heavy cigarette consumption by quantile regression. Results show that price of demand for cigarettes is inelastic and has decreasing trend with higher cigarettes consumption.