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The Economics of Smoking Bans

Author

Listed:
  • Charles A.M. de Bartolome

    (University of Colorado)

  • Ian J. Irvine

    (Concordia University, Montreal)

Abstract

While the empirical literature on smoking bans is extensive, little theory has been developed. This paper examines the welfare impact of smoking bans in an economy where smokers’ utility is reduced by a workplace/public place ban. The government has two instruments - increasing the price through taxation, or limiting when the product can be consumed through a ban. Its ability to reduce smoking through taxation is limited by a black market where cigarettes are not taxed. We show that the quantity instrument (ban) is always welfareenhancing. The model has application to other addictive activities.

Suggested Citation

  • Charles A.M. de Bartolome & Ian J. Irvine, 2010. "The Economics of Smoking Bans," Working Papers 201027, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:201027
    as

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    File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201027.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
    1. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    2. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    3. Charles A.M. de Bartolome, 2007. "Tax competition and the creation of redundant products," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1213-1236, November.
    4. Joni Hersch, 2005. "Smoking Restrictions as a Self-Control Mechanism," Journal of Risk and Uncertainty, Springer, vol. 31(1), pages 5-21, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Smoking ban or cigarette taxation?
      by Economic Logician in Economic Logic on 2010-06-25 21:08:00

    Citations

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    Cited by:

    1. Andrew Leicester & Peter Levell, 2013. "Anti-smoking policies and smoker well-being: evidence from Britain," IFS Working Papers W13/13, Institute for Fiscal Studies.
    2. Ian Irvine & William Sims, 2012. "A Taxing Dilemma: Assessing the Impact of Tax and Price Changes on the Tobacco Market," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 350, May.

    More about this item

    Keywords

    smoking; workplace ban; public place ban; government control; taxation;

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    1. Economic Logic blog

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