[The effect of tobacco prices on consumption: a time series data analysis for Mexico].

Abstract:

OBJECTIVE:To estimate the price elasticity of the demand for cigarettes in Mexico based on data sources and a methodology different from the ones used in previous studies on the topic. MATERIAL AND METHODS:Quarterly time series of consumption, income and price for the time period 1994 to 2005 were used. A long-run demand model was estimated using Ordinary Least Squares (OLS) and the existence of a cointegration relationship was investigated. Also, a model using Dinamic Ordinary Least Squares (DOLS) was estimated to correct for potential endogeneity of independent variables and autocorrelation of the residuals. RESULTS:DOLS estimates showed that a 10% increase in cigarette prices could reduce consumption in 2.5% (p<0.05) and increase government revenue in 16.11%. CONCLUSIONS:The results confirmed the effectiveness of taxes as an instrument for tobacco control in Mexico. An increase in taxes can be used to increase cigarette prices and therefore to reduce consumption and increase government revenue.

journal_name

Salud Publica Mex

journal_title

Salud publica de Mexico

authors

Olivera-Chávez RI,Cermeño-Bazán R,de Miera-Juárez BS,Jiménez-Ruiz JA,Reynales-Shigematsu LM

doi

10.1590/s0036-36342010000800015

subject

Has Abstract

pub_date

2010-01-01 00:00:00

pages

S197-205

eissn

0036-3634

issn

1606-7916

pii

S0036-36342010000800015

journal_volume

52 Suppl 2

pub_type

杂志文章
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