Will Plain Packaging Reduce Cigarette Consumption?
AbstractThe Australian Parliament has passed legislation compelling tobacco products to be sold in ?plain packaging?. This paper reviews this legislation and its likely effects on prices, market structure in the tobacco industry and on smoking behaviour. Industry changes following two previous sets of restrictions on advertising are examined for relevant empirical evidence. Without offsetting tax increases the legislation will plausibly reduce prices but significant entry into the industry and greater consumption of counterfeit/illegal cigarettes are unlikely. Provided that tax increases offset any induced fall in prices that might result, plain packaging will reduce cigarette consumption.
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Bibliographic InfoPaper provided by School of Economics, La Trobe University in its series Working Papers with number 2012.03.
Length: 25 pages
Date of creation: 2012
Date of revision:
Cigarettes; Plain Packaging; Competition; Concentration; Advertising; Entry; Exit;
Other versions of this item:
- Harry Clarke & David Prentice, 2012. "Will Plain Packaging Reduce Cigarette Consumption?," Economic Papers, The Economic Society of Australia, vol. 31(3), pages 303-317, 09.
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- K2 - Law and Economics - - Regulation and Business Law
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
This paper has been announced in the following NEP Reports:
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- Vivienne Pham & David Prentice, 2010.
"An empirical Analysis of the Counter-factual: A Merger and Divestiture in the Australian Cigarette Industry,"
2010.08, School of Economics, La Trobe University.
- Pham, Vivienne & Prentice, David, 2010. "An empirical analysis of the counterfactual: a merger and divestiture in the Australian cigarette industry," MPRA Paper 26713, University Library of Munich, Germany.
- John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
- Eckard, E Woodrow, Jr, 1991. "Competition and the Cigarette TV Advertising Ban," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 119-33, January.
- Paul R. Milgrom & John Roberts, 1984.
"Price and Advertising Signals of Product Quality,"
Cowles Foundation Discussion Papers
709, Cowles Foundation for Research in Economics, Yale University.
- Vivienne Pham & David Prentice, 2013. "A Random Coefficients Logit Analysis of the Counterfactual: A Merger and Divestiture in the Australian Cigarette Industry," Working Papers 2013.04, School of Economics, La Trobe University.
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