Cigarette Demand

PCQ =
3.624 - 0.356 PR + 0.221 PCDI + 0.819 AD - 0.094 D64 - 0.321 D68 - 0.087 T63 - 0.683 POST71AD

PCQ = Per Capita Quantity of Cigarettes Consumed Domestically
            (thousands per person 18 years old & older)

PR = Retail Price/Cigarette Including State and Federal Taxes (in cents, 1982 dollars)

PCDI = Per capita Disposable Income (thousands of 1982 dollars)

AD = Advertising Expenditures (billions of 1982 dollars)

D64 = 1 for 1964-1990; Surgeon General's 1964 Report (Links Smoking & Cancer)

D68 = 1 for 1968-1970; Fairness Doctrine Act
            (Cigarette Companies Required to Air One Antismoking Ad Per Four Prosmoking Ad)

T73 =  Year - 1972; Clean Indoor Air
            (Trend--more states with laws to Limit Second-Hand Smoke Exposure of Non-smokers)

POST71AD = AD for 1971-1990; Post-Broadcast Advertising Ban

[Source: Tremblay, Carol Horton, and Victor J. Tremblay, The Impact of Cigarette Advertising on Consumer Surplus, Profit, and Social Welfare, Contemporary Economic Policy, XIII, January, 1995, pp. 113-124]

Demonstrate that 1999 demand for cigarettes is  Q = 3.527 – 0.356 PR,  when  PCDI = 10, AD = 1, D64 = 0, D68 = 0, POST71AD = 2, T73 = 25.