Cigarette Consumption And Its Impact On Medical Expenditure In China

Tobacco industry plays an important role in social economic development by applying about 8% of government revenue in China. It is necessary to estimate the impact of consumption expenditure, cigarette price, average propensity to cigarette consumption (APCC), regional difference, economic growth, industry upgrades, consumption difference between rural-urban residents and national education level on cigarette consumption when making tobacco industry policy. The residents pay more attention to smoking and health following the increase of healthy conscious. Making tobacco control policy, it is important to valuate medical expenditure related to smoking reasonably. This paper investigated the impact of the above factors on cigarette smoking through revising Theil-Barten demand model, and medical expenditure related to smoking through revising Becker-Murphy rationa addiction theory.The innovations of this paper are follows:First, this paper construct a theoretical model between cigarette consumption and national education level based on utility function. Second, this paper revised Theil-Barten demand model to analyze cigarette consumtion in China. Third, this paper revised Becker-Murphy rational addiction model to analyze the impact of cigarette consumption and its addiction on medical expenditure in China.The main points of the dissertation are follows:(1) The price elasiticity of cigarette demand is between -0.642 and -0.98, and the change of cigarette price will effects cigarette demand significantly. The price elasticity of cigarette demand is much higher than that of developed country. In addition, the regional difference of cigarette demand shows that the price elasticity of underdeveloped, developing and developed region is -0.98, -0.951 and -0.642 respectively, the price elasticity of cigarette demand is smaller with the increase of economic develop level.(2) Consumption expenditure elasticity of cigarette demand is between 0.868 and 0.901, and the impact of consumption expenditure on cigarette demand is higher than the impact of income comparing with some developed country's income elasticity of cigarette demand. The regional difference of cigarette demand suggests that the consumption expenditure elasticity of underdeveloped, developing and developed region is0.976,0.923 and 0.766 respectively, the consumption expenditure elasticity of...