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Tobacco Advertising: Economic Theory and International Evidence

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  • Henry Saffer
  • Frank Chaloupka

Abstract

Tobacco advertising is a public health issue if these activities increase smoking. Although public health advocates assert that tobacco advertising does increase smoking, there is significant empirical literature that finds little or no effect of tobacco advertising on smoking. In this paper, these prior studies are examined more closely with several important insights emerging from this analysis. This paper also provides new empirical evidence on the effect of tobacco advertising. The primary conclusion of this research is that a comprehensive set of tobacco advertising bans can reduce tobacco consumption and that a limited set of tobacco advertising bans will have little of no effect. The regression results indicate that a comprehensive set of tobacco advertising bans can reduce consumption by 6.3 percent. The regression results also indicate that the new European Commission directive tobacco advertising in the EC countries, will reduce tobacco consumption by about 6.9 percent on average in the EC. The regression results also indicate that the ban on outdoor advertising included in the US tobacco industry state level settlement will probably not result in much change in advertising expenditures nor in tobacco use. Under the settlement industry would also contribute $1.5 billion over five years for public education on tobacco use. This counteradvertising could reduce tobacco use by about two percent.

Suggested Citation

  • Henry Saffer & Frank Chaloupka, 1999. "Tobacco Advertising: Economic Theory and International Evidence," NBER Working Papers 6958, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6958
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    References listed on IDEAS

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    1. Schneider, Lynne & Klein, Benjamin & Murphy, Kevin M, 1981. "Governmental Regulation of Cigarette Health Information," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 575-612, December.
    2. Duffy, Martyn, 1995. "Advertising in demand systems for alcoholic drinks and tobacco: A comparative study," Journal of Policy Modeling, Elsevier, vol. 17(6), pages 557-577, December.
    3. Gary S. Becker & Kevin M. Murphy, 1993. "A Simple Theory of Advertising as a Good or Bad," The Quarterly Journal of Economics, Oxford University Press, vol. 108(4), pages 941-964.
    4. repec:aph:ajpbhl:1990:80:5:565-569_4 is not listed on IDEAS
    5. Henry Saffer & Dhaval Dave, 2006. "Alcohol advertising and alcohol consumption by adolescents," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 617-637.
    6. Seldon, Barry J & Doroodian, Khosrow, 1989. "A Simultaneous Model of Cigarette Advertising: Effects on Demand and Industry Response to Public Policy," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 673-677, November.
    7. Mark J. Roberts & Larry Samuelson, 1988. "An Empirical Analysis of Dynamic, Nonprice Competition in an Oligopolistic Industry," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 200-220, Summer.
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    Cited by:

    1. Craig Lemboe & Philip Black, 2012. "Cigarettes taxes and smuggling in South Africa: Causes and Consequences," Working Papers 09/2012, Stellenbosch University, Department of Economics.
    2. Wakefield, Melanie PhD & Ruel, Erin E. MA & Chaloupka, Frank J. PhD & Slater, Sandy J. MS & Kaufman, Nancy J. RN, MS, 2001. "Association of Point of Purchase Tobacco Advertising and Promotions with Choice of Usual Brand Among Teenage Smokers," University of California at San Francisco, Center for Tobacco Control Research and Education qt28h3v79v, Center for Tobacco Control Research and Education, UC San Francisco.
    3. Carlo Ciccarelli & Pierpaolo Pierani & Silvia Tiezzi, 2014. "Secular trends in tobacco consumption: the case of Italy, 1871-2010," Department of Economics University of Siena 700, Department of Economics, University of Siena.
    4. Wakefield, Melanie A. PhD & Terry, Yvonne M. MSA & Chaloupka, Frank J. PhD & Barker, Dianne C. MHS & Slater, Sandy J. MS & Clark, Pamela I PhD & Giovino, Gary A. MS, PhD, 2000. "Changes at the Point-of-Sale for Tobacco Following the 1999 Billboard Ban," University of California at San Francisco, Center for Tobacco Control Research and Education qt88h2t1n7, Center for Tobacco Control Research and Education, UC San Francisco.
    5. Layte, Richard & Russell, Helen & McCoy, Selina, 2002. "The Economics and Marketing of Tobacco: An Overview of the Existing Published Evidence," Research Series, Economic and Social Research Institute (ESRI), number PRS46.
    6. Wakefield, Melanie A PhD & Chaloupka, Frank J. PhD, 1999. "Effectiveness of Comprehensive Tobacco Control Programs in Reducing Teenage Smoking: A Review," University of California at San Francisco, Center for Tobacco Control Research and Education qt46n6b9mv, Center for Tobacco Control Research and Education, UC San Francisco.

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