The demand for cigarettes in Taiwan: Domestic versus imported cigarettes

This paper uses annual time series data from Taiwan to empirically estimate the demand for cigarettes, in consideration of the import liberation of fo reign cigarettes and of antismoking campaigns. The results indicate that th e price elasticities for domestic and imported cigarettes are -0.6 and -1.1 , respectively. The cross-price elasticities are 0.08 for domestic and 2.78 for imported cigarettes. The spread of cigarette health information has ha d a significantly negative effect oil cigarette consumption. In addition, t his study offers mild support to the argument that opening the market to im ported cigarettes has resulted in significant increases in overall cigarett e consumption.