Factors Affecting the Demand for Cigarettes

Few commodities exhibit as strong a trend factor as do cigarettes. The phenomenal rise in popularity in this form of smoking since the early 1920's is well known, but to the analyst seeking to identify factors affecting demand for cigarettes, the strong trend factor which tends to overshadow the effects of other determining influences frequently is a vexing and frustrating obstacle. This article reports the results of statistical analyses of factors affecting the demand for cigarettes. Particular attention is given to alternative methods of handling time as a variable, and to the assumptions regarding the shape of the time trend implicit in each. The author acknowledgesthe helpful suggestions of Arthur G. Conoverand Anthony S. Rojko of the Economic Research Service.