Table 2

SUR model of demand for Roll-Your-Own (RYO) tobacco and manufactured cigarettes (MC)

Constant6.892*** (2.218)10.066*** (2.082)
Ln(price of RYO)−0.441** (0.220)
Ln(price of MC)0.867** (0.373)−1.033*** (0.221)
Ln(average weekly income)−0.804* (0.436)0.397 (0.456)
Non-price policy variable−0.004 (0.002)−0.004 (0.002)
Adjusted R20.270.79
Breusch–Pagan test*†0.043
Portmanteau Q (four and eight lags)*‡0.26; 0.084
Jarque–Bera test*§0.057
Total system observations168
  • SEs in parentheses; ***p<0.01, **p<0.05, *p<0.1.

  • *p Values.

  • BreuschPagan test confirms that at a 5% level the error terms of RYO tobacco and MC demand are correlated and therefore the use of a SUR framework is appropriate.

  • Portmanteau test for serial correlation in the error terms up to lag eight.

  • §Jarque–Bera test for multivariate normal distributed error terms.

  • SUR, seemingly unrelated regression.