Correlation Between Consumption Of Cigarettes And Price

Interpretation of the Findings This study s framework was of a statistical nature. The researchers took statistical data from two different years and compared them against each other, with the only changing variable between the years was an increase in sales tax on tobacco products. The data that was collected indicated that there was a decrease in tobacco sales compared to the year before. Thus, validating the null hypothesis by showing a direct relationship between consumption of cigarettes and price. By looking at the observed ration of reduced consumption to increased price ( 12.1%: 30.2% = 0.40) we can estimate the price elasticity. This elasticity shows the responsiveness of the demand of the product versus its change in price. This ratio was an expected value and shows direct correlation to consumption of tobacco products and there price and is consistent with similar studies done on tax increases on tobacco (Amato, et al., (2015). Limitations However, this increase in taxes was the highest tax increase in a decade in Minnesota. This study was also limited in that it only looked at convenience stores only and was to one specific area. Even with the stated 63% of all cigarettes being bought in these stores it limits the study but not looking at all places where cigarettes are sold. It also limited the types of cigarettes purchased. This study only looked at three types of cigarette sells and do not include the purchase of cartons. Even-though cartonsShow MoreRelatedImposing Taxes on Cigarrettes May Be Beneficial Essay examples810 Words   |  4 Pages Cigarettes are not like normal goods since they for most of their users are addictions. The demand curve is therefore close to inelastic (See figure 1 and Perucic). This is again because customers are addicted to cigarettes and nicotine and will pay the extra money to continue to smoke them. 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