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Advertising Restrictions And Cigarette Smoking: Evidence From Myopic And Rational Addiction Models

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  • NATSUKO IWASAKI
  • CAROL HORTON TREMBLAY
  • VICTOR J. TREMBLAY

Abstract

Because of the high social cost of cigarette smoking, many countries impose advertising restrictions to reduce cigarette consumption. Yet previous studies conclude that advertising constraints have been ineffective at reducing cigarette smoking. This conclusion is incorrect because it ignores the fact that advertising restrictions have supply as well as demand effects. The authors extend existing research by showing that advertising regulations, especially those found in the recent National Tobacco Settlement, have decreased the equilibrium level of cigarette consumption in the United States, a result that holds for both myopic and rational addiction models. (JEL L50, L66, M37)

Suggested Citation

  • Natsuko Iwasaki & Carol Horton Tremblay & Victor J. Tremblay, 2006. "Advertising Restrictions And Cigarette Smoking: Evidence From Myopic And Rational Addiction Models," Contemporary Economic Policy, Western Economic Association International, vol. 24(3), pages 370-381, July.
    • Handle: RePEc:bla:coecpo:v:24:y:2006:i:3:p:370-381
    DOI: 10.1093/cep/byj024
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    Cited by:

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    2. Deliana Kostova & Evan Blecher, 2013. "Does Advertising Matter? Estimating The Impact Of Cigarette Advertising On Smoking Among Youth In Developing Countries," Contemporary Economic Policy, Western Economic Association International, vol. 31(3), pages 537-548, July.
    3. Seonghoon Hong & Alan R. Collins, 2010. "The Impact Of Antismoking Policies In Korea On Quit Success And Smoking Intentions," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 474-487, October.
    4. Jon P. Nelson, 2010. "What is Learned from Longitudinal Studies of Advertising and Youth Drinking and Smoking? A Critical Assessment," IJERPH, MDPI, vol. 7(3), pages 1-57, March.
    5. Yi-Chi Chen & Chang-Ching Lin, 2010. "Threshold Effects in Cigarette Addiction: An Application of the Threshold Model in Dynamic Panels," Economics Bulletin, AccessEcon, vol. 30(4), pages 3128-3142.
    6. Natsuko Iwasaki & Victor Tremblay, 2009. "The effect of marketing regulations on efficiency: LeChatelier versus coordination effects," Journal of Productivity Analysis, Springer, vol. 32(1), pages 41-54, August.

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    More about this item

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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