Responses of Consumers to the Mandatory Disclosure of Information: Evidence from Natural Experiments in Japanese Inter-brand Cigarette Demands
AbstractI estimated inter-brand cigarette demands with nicotine, tar content and policy event information in Japan during 1950-84. The demand for all brands increased but the demand for plain (non-filter) brands decreased due to the dissemination ofgA Note about Health Damage from Smoking h in 1964. The demand for all brands increased but the demand for high-nicotine brands decreased due to the disclosure of nicotine and tar content in 1967 and the labeling warnings in 1972, however consumers had still preferred high-nicotine brands after 1972. Contrastively, the demand for high-tar brands increased in 1967 but decreased in 1972, and consumers had switched to prefer low-tar brands after 1972. Disclosure did not reduce the intake of nicotine but reduced the intake of tar, accordingly disclosure may benefit consumers by reducing the health risk as tar causes cancers. In line with changes in inter-brand demands, the monopolistic firm discontinued old products with poorer quality (plain, high-tar) but provided new better ones (filter-tipped, low-tar).
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 04-13-Rev.
Length: 39 pages
Date of creation: Jun 2004
Date of revision: Feb 2006
disclosure; nicotine; tar; cigarette; inter-brand; panel estimation; difference in difference;
Find related papers by JEL classification:
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-02-26 (Agricultural Economics)
- NEP-ALL-2006-02-26 (All new papers)
- NEP-HEA-2006-02-26 (Health Economics)
- NEP-MIC-2006-02-26 (Microeconomics)
- NEP-MKT-2006-02-26 (Marketing)
- NEP-SEA-2006-02-26 (South East Asia)
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