Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government
This thesis deals with the concept of how price affects demand for a good by estimating various price elasticities of demand for snu sold in Sweden. Information was gathered on price development for snus and cigarettes as well as sales data from Swedish Match, the largest supplier of snus in Sweden....
| Autor principal: | |
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| Formato: | M2 |
| Lenguaje: | Inglés sueco |
| Publicado: |
SLU/Dept. of Economics
2015
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| Materias: |
| _version_ | 1855571222216048640 |
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| author | Ericsson, Karin |
| author_browse | Ericsson, Karin |
| author_facet | Ericsson, Karin |
| author_sort | Ericsson, Karin |
| collection | Epsilon Archive for Student Projects |
| description | This thesis deals with the concept of how price affects demand for a good by estimating various price elasticities of demand for snu sold in Sweden. Information was gathered on price development for snus and cigarettes as well as sales data from Swedish Match, the largest supplier of snus in Sweden. Income-, price- and cross-price elasticities were estimated based on log-log regression. Results show that snus is an inelastic good since the coefficient for price of snus was -0.536. This proved that a 1% increase in price causes a 0.536% decrease in quantity demanded. One of the main arguments from the government for increasing the tax on snus and thereby increasing price was to collect more tax revenue for reformations within the educational system. An elasticity of -0.536 indicates that an increase in tax will decrease demand and therefore also intended revenue. This proves that tax on snus should probably be lowered, since consumers have the possibility of choosing other products similar to snus such as cigarettes or moist snuff that is now considered equally expensive. |
| format | M2 |
| id | RepoSLU7665 |
| institution | Swedish University of Agricultural Sciences |
| language | Inglés swe |
| publishDate | 2015 |
| publishDateSort | 2015 |
| publisher | SLU/Dept. of Economics |
| publisherStr | SLU/Dept. of Economics |
| record_format | eprints |
| spelling | RepoSLU76652015-02-27T13:43:58Z Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government Ericsson, Karin elasticity price of snus rational addiction model tobacco taxation This thesis deals with the concept of how price affects demand for a good by estimating various price elasticities of demand for snu sold in Sweden. Information was gathered on price development for snus and cigarettes as well as sales data from Swedish Match, the largest supplier of snus in Sweden. Income-, price- and cross-price elasticities were estimated based on log-log regression. Results show that snus is an inelastic good since the coefficient for price of snus was -0.536. This proved that a 1% increase in price causes a 0.536% decrease in quantity demanded. One of the main arguments from the government for increasing the tax on snus and thereby increasing price was to collect more tax revenue for reformations within the educational system. An elasticity of -0.536 indicates that an increase in tax will decrease demand and therefore also intended revenue. This proves that tax on snus should probably be lowered, since consumers have the possibility of choosing other products similar to snus such as cigarettes or moist snuff that is now considered equally expensive. Den här studiens syfte var att undersöka hur konsumtionen av snus i Sverige påverkas av prisförändringar. Data samlades in från Statistiska Centralbyrån, Eurostat samt från Swedish Match AB och justerades för inflation från åren 1996-2012. Metoden som valdes till studien var pris elasticitet som jämför hur pris påverkar efterfrågan. Genom att genomföra en regression med variablerna efterfrågan på snus, pris på snus, pris på cigaretter, disponibel inkomst samt en dummy variabel för rökförbudet på baren som infördes 2005 kunde koefficienterna för de olika variablerna räknas ut. Resultatet från metoden visade på en koefficient för pris på snus på -0.536 vilket innebär att om priset höjs med 10% så kommer efterfrågan på snus minska med 5.36%. Detta kan innebära minskade skatteintäkter för regeringen samt en ökad illegal import av snus samt andra substitut från andra länder med lägre skatter och färre restriktioner. SLU/Dept. of Economics 2015 M2 eng swe https://stud.epsilon.slu.se/7665/ |
| spellingShingle | elasticity price of snus rational addiction model tobacco taxation Ericsson, Karin Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government |
| title | Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government |
| title_full | Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government |
| title_fullStr | Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government |
| title_full_unstemmed | Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government |
| title_short | Evaluating the effects of a tax increase : how the Swedish demand for snus will react to the new tax increase proposed by the government |
| title_sort | evaluating the effects of a tax increase : how the swedish demand for snus will react to the new tax increase proposed by the government |
| topic | elasticity price of snus rational addiction model tobacco taxation |