- Estimation of tobacco price elasticity in Serbia using aggregate time-series data
- The elasticity of tobacco products
- The Elasticity of Tobacco Products in Macedonia
- 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
Fiscal policy impact on tobacco consumption in high smoking prevalence transition economies – the case of Albania
Aida Gjika, Klodjan Rama, Edvin Zhllima, Drini Imami
Abstract: This paper analysis the determinant factors of tobacco consumption in of Albania, which is one of the countries with highest smoking prevalence in Europe. To empirically estimate the elasticity of cigarettes demand in Albania, this paper uses the Living Standard Measurement Survey (LSMS) applying the Deaton’s (1988) demand model. Our paper estimates an Almost Ideal Demand System (AIDS), which allows disentangling quality choice from exogenous price variations through the use of unit values from cigarette consumption. Following a three-stage procedure, the estimated results suggest that the price elasticity is around -0.57. The price elasticity appears to be within the range of estimated elasticities in developing countries and in line with the estimates elasticities from the model using aggregate data. In terms of the control variables, it seems that the total expenditure, household size, male to female ratio and adult ratio are important determinants of tobacco demand in Albania. Thus, since an increase in price, which have been mainly driven by the increases of taxes, have demonstrated to have had a significant impact on tobacco consumption, the government should further engage in gradual increase of taxation.
Keywords: tobacco consumption, LSMS, Deaton, elasticity
January 2019
