The model is set up from the basic demand equation. We use the number of retail sales of each commodity as the demand for each commodity. The demand for each commodity depends on the main factors as their own price, and the income of consumers. In addition, because we would like to see the effect of the growth of e-commerce on smuggling, we will put as a factor the number of people who can use the internet into the model as well. For other factors that might be related, we put the lag of the demand for each commodity to capture all other possible incentives for smuggling. We also put the trend term into the model. Then, the estimated equation can be shown as follows: