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- The elasticity of tobacco products
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- Tobacco demand elasticity and fiscal policy- the case of Albania
- The Elasticity of Tobacco Products in BiH- macro data analysis
- Error Correction Model Analysis of Tobacco Consumption in Kosovo*
- Tobacco price elasticity in Serbia: using the micro data from Household Budget Survey and Deaton demand model
- Tobacco price elasticity in Bosnia: micro data analysis
- Tobacco price elasticity in Montenegro: using the micro data from Household Budget Survey and Deaton demand model
- Estimating tobacco price elasticity in Kosovo: using the micro data from Household Budget Survey (2007 – 2017) and Deaton demand model
- Fiscal policy impact on tobacco consumption in high smoking prevalence transition economies – the case of Albania
The elasticity of tobacco products
The elasticity of tobacco products
Mirjana Čizmović, Tanja Laković, Milenko Popović, Ana Mugoša
Abstract: The primary objective of this study is to estimate the price elasticity of cigarette demand in Montenegro, as an important input for a tax policy targeted to reduce tobacco consumption. The estimation was conducted using annual time series aggregate data on cigarette consumption, cigarette prices, income, and public policies from 2001 to 2017. The long-run and short-run elasticities of cigarette demand with respect to price and income are empirically investigated using a conventional static demand model, presented in a linear functional form, by applying Error Correction and ARDL time series methodology. Empirical results suggest that in the long and short run the demand for cigarettes in Montenegro is affected by changes in prices and that this responsiveness is in range with the results obtained in similar studies done in low and middle-income countries. Results indicate that an increase in cigarettes prices and effective tobacco tax policy represents important factors that influence the reduction of the demand for cigarettes in Montenegro.
Keywords: tobacco consumption; price; elasticity; income; Montenegro
January 2019
