Eco Elasticity

Analysis and inferences drawn from the given over tables in Price overcome for Tobacco Products in India: Table 1. Excise duty define for cig arttes and bidis in India year 2007-08. As per the statistics provided by the selective information, Cigarettes scotch for lone(prenominal) 14% of the excise taxation collected from baccy products (ERC 2005). This infers that though the consumption of hindquarterss are relatively cut back (i.e. 14%) when compared to the balance (bidis - 48%, tobacco 38%), the excise revenue generated by cigarettes are higher (85%). This resembles the inelastic behaviour. Table 2.Unit set and reckon shares of different tobacco products. As per the survey conducted by The discipline Sample Survey Organization (NSSO) from July 1999 to June 2000, it was inferred that 62% of the countrified kins and 40% of the urban crime syndicates consume tobacco in some form. Cigarettes are luxurious good which yield more than revenue though the legal injury is high in urban sector. As per the data provided in the table 2, the number of cigarette smokers in urban India is high of which most of them consume modest priced cigarettes accounts a lower clean price of cigarettes in urban India. Table 4.Income and household size coefficients and income grab.

As per the data given in the table, the turnabout analysis implicates that cigarettes have the highest expenditure elasticity of quality at 0.11 in rural and 0.24 in urban India. This implies that the doubling of the household total expenditure would rise the average price paid for cigarettes. From this we can realize that the substitution constituent for cigarettes increases in country-bred India where as the compliment! ary factor increases in case of urban India. Table 5. Price elasticity estimates for tobacco products in India. unpolished India: As per the given data, for an instance, as the price of cigarettes increase by 24% the quantity of bidis demanded decreases by 0.24 times the price of the cigarettes. urban India: But in case of Urban India, the...If you want to build up a full essay, rear it on our website: OrderEssay.net

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