Authors
1 Ph.D, Faculty member, University of Allameh Tabatabae
2 M.A in economics
Abstract
This paper surveys theoretical foundation and empirical results of demand for smoking: Theoretical foundation is based on a model of habit effects .Empirical results is based on a regression for smoking demand in Iran for the period 1363-1379 (1984-2000). The quantity demanded is determinded by price ,income ,literacy, unemployment and divorce rates .The elasticity of demand with respect to first four variables are -0.27, 0.44, 0.2 and -2.54, respectively.The divorce rate is not significant.Thus cigarette is an inelastic and normal necessity good. Also, the significant coefficient of the quadratic term of income confirms the satiation effect. Accordingly, prohibitive policies based on price are not successful and it is necessary to make a shift to non- price measures.
Keywords
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