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U.S. Demand for Tobacco Products in a System Framework
Yuqing Zheng1, Chen Zhen2, Daniel Dench3
1University of Kentucky, Department of Agricultural Economics, Lexington, KY, USA.
Health Economics
|July 13, 2016
Summary
This study analyzed tobacco product demand, finding significant price sensitivities for cigarettes, cigars, and e-cigarettes. Advertising impacts demand, with potential policy implications for harm reduction strategies.
Area of Science:
- Health Economics
- Tobacco Control Policy
- Consumer Behavior Analysis
Background:
- The tobacco market is evolving with diverse product categories.
- Understanding consumer demand is crucial for public health interventions.
- The rise of e-cigarettes necessitates updated market analysis.
Purpose of the Study:
- To estimate the demand system for multiple tobacco products.
- To identify price elasticities and cross-price effects.
- To assess the impact of advertising on tobacco product demand.
Main Methods:
- Utilized market-level scanner data from convenience stores.
- Employed econometric modeling to estimate demand elasticities.
- Analyzed substitute and complement relationships between products.
Main Results:
- Own-price elasticities varied across products, with e-cigarettes being the most price-sensitive.
- Identified significant price substitution between cigarettes and e-cigarettes.
- Found that magazine and television advertising positively influenced e-cigarette demand.
Conclusions:
- Price and advertising significantly shape demand for various tobacco products.
- Findings offer insights for tobacco control policies and harm reduction strategies.
- Regional variations in demand elasticities warrant tailored policy approaches.
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