Table 7

The estimates of price and income elasticity of demand for cigarettes in Bangladesh

FactorPrice elasticityIncome elasticity
Smoking prevalence: Probit (A)0.040.01−
Smoking prevalence: IV Probit (B)−0.29−0.50−0.31−
Conditional demand: OLS (C)−0.21−0.43−0.07−
Conditional demand: 2SLS (D)−0.20−0.25−0.09−
Total (B+D)−0.49−0.75−0.40−0.360.230.330.150.18
  • ‘Low’, ‘Medium’ and ‘High’ refers to the socioeconomic status of respondents based on housing index. The total price elasticity is obtained by summing the IV probit estimates in row B and the 2SLS estimates in row D.

  • OLS, ordinary least squares; 2SLS, two-stage least squares.