Smoking in Brazil: estimation of price-and income-elasticities of participation and demand for industrialized cigarettes in Brazil

Abstract

The purpose of this article is to estimate price- and income-elasticities of participation and demand for industrialized cigarettes in Brazil. Public policies aiming at reducing the demand for tobacco have become more important since 2005, when Brazil ratified the WHO Framework Convention on Tobacco Control (FCTC), pledging to strengthen tobacco control. Calculating elasticities is useful for public policy design. We employed Global Adult Tobacco Survey (Gats) from 2008. To estimate price and income elasticities of participation probit models have been employed, while a tobit model were preferred for estimating elasticities of demand, which account for censored sample. Results indicate that both price and income are negatively correlated with participation and demand, suggesting that policies based on price raises can be effective in reducing smoking whether associated to other tobacco control policies or not.