Аннотация:Tobacco represents one of the most important crop within the European Common
Agriculture Policy (CAP), with a total budget cost of 963 millions euros in 2002
and the highest ratio (6:1) between European financial support and gross saleable
production (EC Commission Report, 2003). Nevertheless, the tobacco industry has
never been analyzed in details except in the paper by Vernon, Rives, and Naylor
(1969) which analyzed the American market. We started analyzing the Italian tobacco
industry using fifty years of data and some of the latest economic models used for crops
subjected to the European CAP regime. The effects of three different kind of public
regulation were examined and interesting empirical evidence is reported. We then
did a step further and we proposed a Vector Error Correction approach to take into
account the latest developments in econometric estimation techniques together with
the main economic determinants highlighted in the first step.