The estimates of price and income elasticity of demand for cigarettes in Bangladesh
| Factor | Price elasticity | Income elasticity | ||||||
|---|---|---|---|---|---|---|---|---|
| All | Low | Medium | High | All | Low | Medium | High | |
| Smoking prevalence: Probit (A) | 0.04 | 0.01 | −0.00 | 0.13 | 0.09 | 0.13 | 0.08 | 0.07 |
| Smoking prevalence: IV Probit (B) | −0.29 | −0.50 | −0.31 | −0.15 | 0.13 | 0.14 | 0.10 | 0.09 |
| Conditional demand: OLS (C) | −0.21 | −0.43 | −0.07 | −0.14 | 0.08 | 0.17 | 0.04 | 0.03 |
| Conditional demand: 2SLS (D) | −0.20 | −0.25 | −0.09 | −0.21 | 0.10 | 0.18 | 0.04 | 0.09 |
| Total (B+D) | −0.49 | −0.75 | −0.40 | −0.36 | 0.23 | 0.33 | 0.15 | 0.18 |
‘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.