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The Effects of Government Regulation on Teenage Smoking

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  • Lewit, Eugene M
  • Coate, Douglas
  • Grossman, Michael

Abstract

We examine the impact of three sets of government regulations on the demand for cigarettes by teenagers in the United States. These are: (1) the excise tax on cigarettes, (2) the Fairness Doctrine of the Federal Communications Commission, which resulted in the airing of anti-smoking messages on radio and television from July 1, 1967 to January 1, 1971,and (3) the Public Health Cigarette Smoking Act of 1970, which banned pro-smoking cigarette advertising on radio and television after January 1, 1971.Teenage price elasticities of demand for cigarettes are substantial and much larger than the corresponding adult price elasticities. The teenage smoking participation elasticity equals -1.2, and the quantity smoked elasticity equals -1.4. It follows that, if future reductions in youth smoking are desired, an increase in the Federal excise tax is a potent policy to accomplish this goal. The contention of the proponents of the advertising ban that the Fairness Doctrine failed in the case of teenagers is incorrect. According to our results, the doctrine had a substantial negative impact on teenage smoking participation rates. Extrapolations suggest that the advertising ban was no better or worse a policy than the Fairness Doctrine.
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Suggested Citation

  • Lewit, Eugene M & Coate, Douglas & Grossman, Michael, 1981. "The Effects of Government Regulation on Teenage Smoking," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 545-569, December.
  • Handle: RePEc:ucp:jlawec:v:24:y:1981:i:3:p:545-69
    DOI: 10.1086/466999
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    References listed on IDEAS

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    1. Victor R. Fuchs & Robert T. Michael & Sharon R. Scott, 1979. "A State Price Index," NBER Working Papers 0320, National Bureau of Economic Research, Inc.
    2. Hamilton, James L, 1972. "The Demand for Cigarettes: Advertising, the Health Scare, and the Cigarette Advertising Ban," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 401-411, November.
    3. Warner, K.E., 1977. "The effects of the anti smoking campaign on cigarette consumption," American Journal of Public Health, American Public Health Association, vol. 67(7), pages 645-650.
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