Estimation of price elasticity of demand for tobacco products in Armenia

Abstract

This paper aims at estimating the price elasticity of demand for tobacco products in Armenia. The data is collected from the database of Statistical Committee of the Republic of Armenia, and then transformed for obtaining the variables of our interest. Autoregressive distributed lag models have been used for the identification of the relationship between variables of our interest, i.e. consumption, price, imports, etc., and estimation of the price elasticity. The paper proceeds to argue that prices can be used to control the consumption of tobacco products and seeks to find the data-driven proof for this assumption.