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by Frank Chaloupka National
Bureau of Economic Research, Inc. Cigarette demand equations,
derived from the Becker-Murphy Model of rational addictive behavior, are
estimated separately for men and women. These demand equations account
for the reinforcement, tolerance, and withdrawal factors characterizing
addictive consumption. Results obtained from these demand equations support
the hypothesis that cigarette smoking is an addictive behavior. Particularly
interesting are the findings that men are responsive to changes in the
price of cigarettes, with a long run price elasticity centered on -0.60,
while women are virtually unresponsive to price changes. Men, however,
are found to behave more myopically than women.
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