Private Profits and Public Health: Does Advertising Smoking Cessation Products Encourage Smokers to Quit?
AbstractTo shed new light on the role private profit incentives play in promoting public health, in this paper we conduct an empirical study of the impact of pharmaceutical industry advertising on smoking cessation decisions. We link survey data on individual smokers with an archive of magazine advertisements. The rich survey data allow us to measure smokers' exposure to smoking cessation advertisements based on their magazine-reading habits. Because we observe the same information about the consumers that the advertisers observe, we can control for the potential endogeneity of advertising due to firms' targeting decisions. We find that when smokers are exposed to more advertising, they are more likely to attempt to quit and are more likely to have successfully quit. While some of the increased quitting behavior involves purchases of smoking cessation products, our results indicate that advertisements for smoking cessation products also increase the probability of quitting without the use of any product. Thus, the public health returns to smoking cessation product advertisements exceed the private returns to the manufacturers. Because advertising of a wide range of consumer products may have important and under-studied spillover effects on various non-market behaviors, our results have broad implications for the economics of advertising.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11938.
Date of creation: Jan 2006
Date of revision:
Publication status: published as Avery, R.J., D.S. Kenkel, D.Lillard, and A. Mathios. "Private Profits and Public Health: Does Advertising Smoking Cessation Products Encourage Smokers to Quit?" Journal of Political Economy 115, 3 (2007): 447-481.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-24 (All new papers)
- NEP-HEA-2006-01-24 (Health Economics)
- NEP-MKT-2006-01-24 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John E. Calfee & Clifford Winston & Randolph Stempski, 2002. "Direct-to-Consumer Advertising and the Demand for Cholesterol-Reducing Drugs," Journal of Law and Economics, University of Chicago Press, vol. 45(S2), pages 673-690.
- Tauras, John A. & Chaloupka, Frank J. & Emery, Sherry, 2005. "The impact of advertising on nicotine replacement therapy demand," Social Science & Medicine, Elsevier, vol. 60(10), pages 2351-2358, May.
- repec:reg:wpaper:425 is not listed on IDEAS
- W. Kip Viscusi, 1995.
"Cigarette Taxation and the Social Consequences of Smoking,"
in: Tax Policy and the Economy, Volume 9, pages 51-102
National Bureau of Economic Research, Inc.
- W. Kip Viscusi, 1994. "Cigarette Taxation and the Social Consequences of Smoking," NBER Working Papers 4891, National Bureau of Economic Research, Inc.
- Meredith B. Rosenthal & Ernst R. Berndt & Julie M. Donohue & Arnold M. Epstein & Richard G. Frank, 2003. "Demand Effects of Recent Changes in Prescription Drug Promotion," NBER Chapters, in: Frontiers in Health Policy Research, Volume 6, pages 1-26 National Bureau of Economic Research, Inc.
- Rosemary Avery & Donald Kenkel & Dean Lillard & Alan Mathios, 2007.
"Regulating advertisements: the case of smoking cessation products,"
Journal of Regulatory Economics,
Springer, vol. 31(2), pages 185-208, April.
- Rosemary J. Avery & Donald S. Kenkel & Dean R. Lillard & Alan D. Mathios, 2006. "Regulating Advertisements: The Case of Smoking Cessation Products," NBER Working Papers 12001, National Bureau of Economic Research, Inc.
- Suranovic, Steven M. & Goldfarb, Robert S. & Leonard, Thomas C., 1999. "An economic theory of cigarette addiction," Journal of Health Economics, Elsevier, vol. 18(1), pages 1-29, January.
- Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
- Ippolito, Pauline M & Mathios, Alan D, 1995. "Information and Advertising: The Case of Fat Consumption in the United States," American Economic Review, American Economic Association, vol. 85(2), pages 91-95, May.
- Rosenthal Meredith B. & Berndt Ernst R. & Donohue Julie M. & Epstein Arnold M. & Frank Richard G., 2003. "Demand Effects of Recent Changes in Prescription Drug Promotion," Forum for Health Economics & Policy, De Gruyter, vol. 6(1), pages 1-28, January.
- Gary S. Becker & Kevin M. Murphy, 1986.
"A Theory of Rational Addiction,"
University of Chicago - George G. Stigler Center for Study of Economy and State
41, Chicago - Center for Study of Economy and State.
- Davina C. Ling & Ernst R. Berndt & Margaret K. Kyle, 2002. "Deregulating Direct-to-Consumer Marketing of Prescription Drugs: Effects on Prescription and Over-the-Counter Product Sales," Journal of Law and Economics, University of Chicago Press, vol. 45(S2), pages 691-723.
- Toshiaki Iizuka & Ginger Zhe Jin, 2005. "Drug Advertising and Health Habit," NBER Working Papers 11770, National Bureau of Economic Research, Inc.
- Frank A. Sloan & Jan Ostermann & Christopher Conover & Donald H. Taylor, Jr. & Gabriel Picone, 2006. "The Price of Smoking," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693453, December.
- Talia Bar & Dean R. Lillard, 2014. "Direct to Consumer Advertising of Pharmaceutical Drugs: Information and Persuasion," NBER Working Papers 19794, National Bureau of Economic Research, Inc.
- Henry Saffer & Melanie Wakefield & Yvonne Terry-McElrath, 2007. "The Effect of Nicotine Replacement Therapy Advertising on Youth Smoking," NBER Working Papers 12964, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.