title: An empirical analysis of cigarette demand in Argentina.
abstract: OBJECTIVE
  To estimate the long-term and short-term effects on cigarette demand in Argentina based on changes in cigarette price and income per person >14 years old.
  
  
  METHODS
  Public data from the Ministry of Economics and Production were analysed based on monthly time series data between 1994 and 2010. The econometric analysis used cigarette consumption per person >14 years of age as the dependent variable and the real income per person >14 years old and the real average price of cigarettes as independent variables. Empirical analyses were done to verify the order of integration of the variables, to test for cointegration to capture the long-term effects and to capture the short-term dynamics of the variables.
  
  
  RESULTS
  The demand for cigarettes in Argentina was affected by changes in real income and the real average price of cigarettes. The long-term income elasticity was equal to 0.43, while the own-price elasticity was equal to -0.31, indicating a 10% increase in the growth of real income led to an increase in cigarette consumption of 4.3% and a 10% increase in the price produced a fall of 3.1% in cigarette consumption. The vector error correction model estimated that the short-term income elasticity was 0.25 and the short-term own-price elasticity of cigarette demand was -0.15. A simulation exercise showed that increasing the price of cigarettes by 110% would maximise revenues and result in a potentially large decrease in total cigarette consumption.
  
  
  CONCLUSIONS
  Econometric analyses of cigarette consumption and their relationship with cigarette price and income can provide valuable information for developing cigarette price policy.
authors.affiliation: Instituto de Estudios Laborales y del Desarrollo Económico (IELDE) and Consejo de Investigaciones de la Universidad Nacional de Salta (CIUNSa), Facultad de Ciencias Económicas, Universidad Nacional de Salta, Salta, Argentina.
authors.forename: Eugenio
authors.initials: E
authors.lastname: Martinez
authors.affiliation: Centro de Estudios de Estado y Sociedad and Programa de Medicina Interna General, Universidad de Buenos Aires, Buenos Aires, Argentina.
authors.forename: Raul
authors.initials: R
authors.lastname: Mejia
authors.affiliation: Division of General Internal Medicine, Department of Medicine, Medical Effectiveness Research Center for Diverse Populations, Helen Diller Family Comprehensive Cancer Center, University of California, San Francisco, California, USA.
authors.forename: Eliseo J
authors.initials: EJ
authors.lastname: Pérez-Stable
mesh_terms: D000293:Adolescent; D000328:Adult; D001118:Argentina; D003132:Commerce; D006801:Humans; D007182:Income; D017059:Models, Econometric; D012907:Smoking / Q000191:economics; D016540:Smoking Cessation / Q000191:economics*; D000074606:Smoking Prevention; D019460:Tobacco Industry; D062789:Tobacco Products / Q000191:economics*
keywords: Economics; Price; Tobacco industry