Tobacco consumption and taxation in Italy: An application of the QUAIDS model

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Estimates are presented of the demand for tobacco in Italy in the context of a demand system approach. The grouping of goods is based on Varian's non-parametric test for weak separability. The parametric demand model is Banks, Blundell and Lewbel's QUAIDS model, which combines the empirical flexibility of quadratic logarithmic Engel curves with integrability. Estimation is by iterative GMM procedure. The estimates are used in an analysis of welfare-improving tax reforms which incorporates distributional data. The results are discussed with respect to the special features of the Italian tobacco market.

Original languageEnglish
Pages (from-to)595-603
Number of pages9
JournalApplied Economics
Issue number5
Publication statusPublished - May 1996



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