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The objective of this study is to estimate the sensitivity of cigarette quantity demanded to price and income changes in Montenegro. The sensitivity of cigarette quantity demanded to price and income changes was estimated using micro and macro analysis. Micro analysis implied the use of Deaton's model on Household Budget Survey data (2006-2017). In macro analysis, conventional static demand model is applied using error correction and autoregressive distributed lag time series methodology on annual time series aggregated data (2001-2017
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