BACKGROUND-AIM:
Understanding how cigarette consumption responds to changes in prices and incomes is essential for effective tobacco taxation. Although many studies estimate cigarette demand elasticities, most focus on individual countries, and cross-European evidence remains limited. Existing multi-country studies often rely on commercial datasets, constraining transparency and replicability. This paper provides updated elasticity estimates for Europe using a harmonized panel covering both EU Member States and EU candidate countries for the period 2011-2024. A key novelty is the use of publicly available data from the European Commission’s Taxes in Europe database, complemented with national sources for candidate countries. The ongoing update of the EU Tobacco Tax Directive (TTD) gives this research particular relevance, as robust elasticity estimates are needed to inform potential reforms.

METHODS:
We compiled a harmonized yearly panel dataset from European Commission sources, covering cigarette consumption, prices, and tax rates, and supplemented it with comparable indicators for EU candidate countries from national statistical databases. The primary empirical approach is an instrumental-variable (IV) strategy, using cigarette excise taxes as instruments for cigarette prices to address potential endogeneity. The baseline model estimates price and income elasticities using country and time fixed effects, with robustness checks comparing IV estimates to standard fixed-effects results. In a later step, the analysis will explore heterogeneity across country groups - Western vs. Central and Eastern Europe (CEE) and EU vs. candidate countries - to assess whether structural, regulatory, or economic differences influence elasticity patterns.

RESULTS:
The analysis confirms that rising prices are an important factor influencing cigarette demand in Europe. Income responsiveness is positive but modest, indicating that economic changes lead only gradually to adjustments in consumption, partly depending on the pace of real income growth. Further analyses will assess whether elasticity patterns differ across Western Europe and CEE countries, as well as between EU Member States and candidate countries.

CONCLUSIONS:
By incorporating candidate countries and relying on publicly accessible data from the European Commission and national sources, this study broadens the evidence base on cigarette demand in Europe and improves transparency and replicability. Country-group analyses could provide further insights into how economic development, regulatory frameworks, and stages of EU integration shape tobacco consumption. Structured in this way, the study provides strong empirical basis for the formulation of effective and context-sensitive excise tax policies across Europe.