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Cliometrica

, Volume 8, Issue 2, pp 145–171 | Cite as

The demand for tobacco in post-unification Italy

  • Carlo Ciccarelli
  • Gianni De Fraja
Original Paper

Abstract

This paper studies the demand for tobacco products in post-unification Italy. We construct a very detailed panel data set of yearly consumption in the 69 Italian provinces from 1871 to 1913 and use it to estimate the demand for tobacco products. We find support for the Becker and Murphy (J Polit Econ 96:675–700, 1988) rational addiction model. We also find that, in the period considered, tobacco was a normal good in Italy: aggregate tobacco consumption increased with income. Subsequently, we consider separately the four types of products which aggregate tobacco comprises (fine-cut tobacco, snuff, cigars, and cigarettes), and tentatively suggest that habit formation was a stronger factor on the persistence of consumption than physical addiction. The paper ends by showing that the introduction of the Bonsack machine in the early 1890s did not coincide with changes in the structure of the demand for tobacco, suggesting cost-driven technological change.

Keywords

Smoking Italian Kingdom Rational addiction Panel data 

JEL Classification

D11 N33 I18 

Notes

Acknowledgments

We would like to thank Brian A’Hearn, Stefano Fenoaltea, Jesse Matheson, Alessandro Nuvolari, Pierpaolo Pierani, Ludovic Renou, James Rockey, Silvia Tiezzi, Chris Wallace, Jacob Weisdorf, and the audience at the April 2012 FRESH meeting in Pisa and at the Banca d’Italia for precious suggestions.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Dipartimento di Economia e FinanzaUniversità di Roma “Tor Vergata”RomeItaly
  2. 2.Nottingham School of EconomicsNottinghamUK
  3. 3.C.E.P.RLondonUK

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