Files
Abstract
Empirical investigations seeking to determine the income elasticity of demand for cigarettes
in the United States have been few, and have been based chiefly on time-series data.
Their findings have been in general agreement, showing the income elasticity to be about
0.5 or 0.6. This article describes an investigation based on a cross-section approach using
data from a recent survey of the Bureau of the Census on smoking characteristics in
relation to income and other factors. A feature of this investigation is the disaggregation
of demand data by age and sew. The income elasticity of demand for cigarettes obtained
from this analysis is indicated to be lower than found by earlier investigators. These
results are compared with those of previous studies, and some reasons are advanced for
the differences.