Abstract
Enacting Ordinance No LXXIV 2002, Pakistan has developed crucial anti-tobacco policies in the last two decades. We, therefore, examine in this paper effects of both price (cigarette taxation) and non-price (public regulations on cigarette smoking) anti-tobacco policies on cigarette demand. To accomplish this objective, we examine the short and long run dynamics of cigarette demand in Pakistan using auto-regressive distributed lag (ARDL) estimator covering the period 1981-2018 (annual observations). The study compares price elasticity estimated with and without regulations on cigarette smoking. The result obtained shows that when price increases by 10%, cigarette consumption decreases by 5% in the short run while it decreases by 6.9% in the long run. This finding confirms that cigarette demand model, in Pakistan, is in-elastic. More interestingly, the study finds that non-price regulations on smoking and cigarette demand have negative and statistically significant association. This finding confirms that non-price regulations influences the long-term dynamics of cigarette smoking in Pakistan. Furthermore, we obtain low price elasticity with non-price regulations and high price elasticity without non-price regulations while estimating cigarette demand equation. This empirical result is an evident of the fact that estimated cigarette price elasticity without incorporating non-price regulations into the demand model, are upward biased. The study therefore, concludes that smoking regulation policy based on overstated cigarette price elasticity would produce ambiguous outcomes. Hence, relying only on cigarette taxation (price policy) to regulate cigarette smoking would not produce desirable outcome. In addition, university education is positively and significantly associated with cigarette consumption. This finding show that our university education do not properly convey anti-smoking message to students. To reduce cigarette smoking, Pakistan will have to implement stronger, more comprehensive and better enforced non-price regulations along with taxes on cigarettes.
Highlights
Cigarette smoking is harmful to health of all individuals
The result obtained indicates that cigarette smoking increases with the increase of enrollment in Pakistani universities
From the estimated model of the study we concludes, that beside cigarette taxation, regulations on smoking play a significant role in reducing cigarette consumption
Summary
Cigarette smoking is harmful to health of all individuals (smokers as well as nonsmokers). Believe that non-price regulations on smoking along with cigarette taxes will prove highly significant in reducing cigarette smoking In this line, one can see a number of developments in Pakistan tobacco control policies since the promulgation of Ordinance No LXXIV 2002. Extensive demand models for cigarette have been empirically examined in studies from developed and developing countries as well Beside price effect, these models of cigarette demand have introduced government regulation on smoking like, restrictions on cigarette smoking in work place and or public place, banning cigarette advertising and promotion, health warning on cigarette packets and restriction on selling cigarettes to minors, all of which could play a significant role in reducing demand for cigarette. Suggestions and policy implications are reported in the final section
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
