Are Chinese smokers sensitive to price?

Listed in:

• Adults' demand for tobacco products
• Tax, price and tobacco use: Adults

Abstract

We estimate cigarette price and income elasticities for urban China, 1995. We find an overall cigarette price elasticity of 0.5, which lies between previous estimates. This implies that a 10% increase in price would result in a decline in cigarette consumption of 4.5 billion packs and would raise Y34 billion in additional tax revenue.