Adapted demand model formulae: Formula (2) ln C t = 1t + 2 LnPt + 3 LnGNI t + 4 Rural t + 5 LnTax t + t (1) t (years) where t = 1, 2, 3 31 Formula (3) ln C t = 1t + 2 P t + 3 LnGNI t + 4 Rural t + 5 Tax t + 6 POL t + t (1) t (years) where t = 1, 2, 3 31 Formula (4) ln C t = 1t + 2 P t + 3 LnGNI t + 4 Rural t + 5 Tax t + 6 L1POL t + t (1) t (years) where t = 1, 2, 3 30 Formula (5) ln C t = 1t + 2 LnP t + 3 LnGNI t + 4 Rural t + 5 LnTax t + 6 POL t + t (1) t (years) where t = 1, 2, 3 31 Formula (6) ln C t = 1t + 2 LnP t + 3 LnGNI t + 4 Rural t + 5 LnTax t + 6 L1POL t + t (1) t (years) where t = 1, 2, 3 30 Analysis and Results Table 2 - OLS for annual cigarette consumption per person N=Number of Observations *=10% significance level **=5% significance level ***=1% significance level Robust standard errors in parentheses DW = Durbin-Watson test By using the estimated Equation (1) and computing the OLS with robust standard errors, I aim to observe how significant a change in taxation affects smoking behaviour, which is measured by the consumption level

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