How Do Chinese Smokers Respond to Cigarette Price? Evidence From a Nationwide Household Survey

A primary contribution of this study is the provision of a more reliable estimation of cigarette price and income elasticities in China. These parameters are crucial for assessing the potential impact of tobacco tax increases on cigarette consumption and government revenue. By leveraging a nationally representative survey from 2012 and employing Deaton's identification strategy, we significantly enhanced the data quality and methodological rigor of our analysis, leading to more accurate estimation results compared to previous studies.