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Quasi‐Experimental Price Elasticities of Cigarette Demand and the Bootlegging Effect
Author(s) -
Baltagi Badi H.,
Goel Rajeev K.
Publication year - 1987
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242184
Subject(s) - economics , econometrics , sensitivity (control systems) , price elasticity of demand , microeconomics , engineering , electronic engineering
This paper updates the Lyon and Simon quasi‐experimental price elasticities of cigarette demand and studies their sensitivity to changes in the cigarette market over time as well as their sensitivity to the effects of bootlegging. The results indicate a downward trend in these elasticities over time and an upward bias for states where bootlegging exists. However, once the comparison group is modified to include bootlegging‐free states only, this difference over time and across groups becomes statistically insignificant.