Multiple Dimensions of Cigarette Smoking and Responsiveness to Cigarette Price Changes in Taiwan

This study investigates how smokers respond to both short- and long-run changes in the price of cigarettes in multiple dimensions of smoking behavior. Using a sample of males from a national longitudinal survey in Taiwan, we estimated the demand for cigarettes under both short- and long-run specifications using a quality-purged price index. We found a modest short-run price elasticity of demand for cigarettes and a long-run elasticity of demand that did not significantly exceed the short-run elasticity. We also found that smokers responded to higher cigarette prices by smoking each cigarette more fully without changing their choices of tar and nicotine content to compensate for reduced cigarette consumption.

Tsai-Ching LiuEmail:

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Chung-Ping A. Loh   is an assistant professor of Economics at the University of North Florida. He holds a Ph.D. in economics from the University of North Carolina at Chapel Hill. His research interests are in economic modeling of health behaviors and health care access. Chin-Shyan Chen   has a Ph.D. in economics from the University of North Carolina at Chapel Hill, USA. He has been engaged in research in the area of health economics. Currently, he serves as a professor in the Department of Economics, National Taipei University, Taiwan. Tsai-Ching Liu   has a Ph.D. in economics from the University of North Carolina at Chapel Hill, USA. She has been engaged in research in the areas of health economics and public finance. At present, she works as a professor in the Department of Public Finance, National Taipei University, Taiwan.