The effect of tobacco advertising bans on tobacco consumption
Introduction
The evidence implicating smoking in the deaths of millions of people is substantial and well documented. The Office on Smoking and Health (1994) estimates that in the US there are over 400,000 premature deaths per year due to smoking. Peto et al. (1994) estimate that in developed countries there are about 2 million premature deaths per year due to smoking. These include death from cancer, heart disease, strokes, and other causes. Smoking is also responsible for a considerable amount of illness including chronic lung disease and low birth weight.
Tobacco advertising is a public health issue if it increases smoking. Although public health advocates (for example Roemer, 1993) claim that tobacco advertising does increase smoking, there is a significant empirical literature that finds little or no effect of tobacco advertising on smoking (for example Hoek, 1999). This empirical literature on advertising provides the basis for the tobacco industry claim that its advertising only affects market share among various competing brands. In this paper, the methodologies used in prior studies of tobacco advertising are examined more closely and new empirical evidence on the effect of advertising bans on tobacco consumption is presented.
Section snippets
Advertising and consumption
Advertising is an important method of competition in industries that are highly concentrated, such as the cigarette industry. Firms in industries of this type tend not to compete by price, but try to increase sales with advertising and other marketing techniques. Since a number of prior studies have found little relationship between advertising and tobacco consumption, it is important to examine this literature before proceeding with a new empirical study. Economic theory provides some insights
Empirical analysis of advertising bans
One reason that the empirical results from prior studies of the effects of advertising bans are mixed is that the bans must be sufficiently inclusive to reduce the average product of the non-banned media. The studies by Hamilton (1975) and Laugesen and Meads (1991) suggest that this may not have been true in the past. However, since the late 1980s, a number of countries have enacted more comprehensive tobacco advertising bans. These changes provide an opportunity to reexamine the effects of
Conclusions
The primary conclusion of this research is that tobacco advertising increases tobacco consumption. The empirical evidence also shows that comprehensive advertising bans can reduce tobacco consumption, but that a limited set of advertising bans will have little or no effect. A limited set of advertising bans will not reduce the total level of advertising expenditure but will simply result in substitution to the remaining non-banned media. When more of the remaining media are eliminated, the
Acknowledgements
Funded by grant number R01 CA63458 from the National Cancer Institute. Helpful comments were provided by Michael Grossman, K. Michael Cummings and Kenneth Warner. Research assistance was provided by Dhaval Dave.
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