The Gradual Response of Cigarette Demand to Health Information

The paper focuses on the US cigarette industry and uses a gradual switching regression model to estimate changes in the US demand for cigarettes over time. This technique is found to be superior to the use of dummy variables in capturing the health scare. The results show that cigarette demand gradually decreased over a ten‐year period coinciding with the release of key health information. Price and advertising elasticities have gradually diminished, which is consistent with a change in the mix of US consumers before and after the switch.     

The Demand for Cigarettes in the Republic of Korea and Implications for Government Policy to Lower Cigarette Consumption

The government of the Republic of Korea has become concerned with reducing cigarette consumption, which historically has been very prevalent. This study contributes to the debate over cigarette policies in South Korea, with implications for other Asian countries with similar economic and cultural backgrounds. The authors estimate cigarette demand in South Korea over the period 1960–97, considering various government policies employed to reduce cigarette consumption. Results of the estimation suggest that taxation appears to be a viable means of reducing cigarette consumption, but methods to inform the public about the health hazards of smoking should be reconsidered and strengthened. (JEL H51 , I18 , L66 )     

EFFECTS OF HEALTH RISK INFORMATION ON ADDICTIVE GOODS CONSUMPTION: A CASE OF TOBACCO,ALCOHOL, AND BETEL NUTS IN TAIWAN

This paper empirically investigates the relationship between the dissemination of information about the health risks of tobacco, alcohol, and betel nuts and their consumption in Taiwan. To estimate cross‐elasticities, the paper uses the Central Bureau of Statistics demand system model. Empirical results indicate that an increase in the dissemination of information on the health risks of tobacco, alcohol, and betel nuts substantially reduces real consumption. Empirical evidence from the cross‐elasticity of price also confirms that a complementary relationship exists in Taiwan among these three addictive products. (JEL D12, Q11, H26)     

THE DEMAND FOR CIGARETTES IN TAIWAN: DOMESTIC VERSUS IMPORTED CIGARETTES

This paper uses annual time series data from Taiwan to empirically estimate the demand for cigarettes, in consideration of the import liberation of foreign cigarettes and of antismoking campaigns. The results indicate that the price elasticities for domestic and imported cigarettes are -0.6 and-1.1, respectively. The cross-price elasticities are 0.08 for domestic and 2.78 for imported cigarettes. The spread of cigarette health information has had a significantly negative effect on cigarette consumption. In addition, this study offers mild support to the argument that opening the market to imported cigarettes has resulted in significant increases in overall cigarette consumption. (JEL D12, 118)     

Unemployment,insurance and smoking

Using recent state-level data from the United States, this article examines new influences on cigarette demand. In particular, we uniquely focus on the effects of unemployment and health insurance coverage on smoking. Results show that higher cigarette prices, a lack of health insurance and restrictions on smoking at home, all lead to reduced smoking. On the other hand, literacy, income, unemployment, workplace smoking restrictions, smokeless tobacco taxes and tobacco-producing states do not seem to have an appreciable impact. The magnitude of the price elasticity of demand is greater than that found in the pre-MSA era. Policy implications are discussed.     

Information shocks and cigarette addiction: views from dynamic panels with common structural changes

In this article we attempt to evaluate the impact of various information shocks on cigarette consumption. In contrast to the existing studies, we do not impose any break points a priori. We use recently developed techniques for sample splitting in the data on US cigarette demand, and find that using a time index as a transition variable can cluster cigarette demand into four distinct regimes. In the past four decades a myopic-to-rational switch in cigarette consumption behaviour was observed in response to various anti-smoking information events. In particular, we find strong evidence in support of the rational addiction model in the 1980s and 1990s. Moreover, in line with the theoretical prediction, our estimate of the long-run elasticity is twice as large as the short-run elasticity. Our empirical framework should improve policy makers' understanding of the dynamics of cigarette consumption in response to various anti-smoking campaigns, and stress the role of sound policy making in improving smoking control measures.     

ADVERTISING RESTRICTIONS AND CIGARETTE SMOKING: EVIDENCE FROM MYOPIC AND RATIONAL ADDICTION MODELS

Because of the high social cost of cigarette smoking, many countries impose advertising restrictions to reduce cigarette consumption. Yet previous studies conclude that advertising constraints have been ineffective at reducing cigarette smoking. This conclusion is incorrect because it ignores the fact that advertising restrictions have supply as well as demand effects. The authors extend existing research by showing that advertising regulations, especially those found in the recent National Tobacco Settlement, have decreased the equilibrium level of cigarette consumption in the United States, a result that holds for both myopic and rational addiction models. (JEL L50, L66, M37 )     

Aggregate cigarette demand and regional differences in China

National educational level, final consumption expenditure, average propensity to cigarette consumption (APCC) and cigarette price are adopted to research the regional and national aggregate cigarette demand of China. Under the condition that the effects of anti-smoking education in the Chinese current educational system are not remarkable, the theoretical model shows that cigarette demand will increase with the increase of national educational level. Empirical analysis points out that cigarette demand increases with the increase of educational level. Estimates also suggest that cigarette price, consumption expenditure and APCC will affect cigarette demand significantly, and that there are great differences for cigarette demand by region.     

Effects of health information on Nordic meat and fish demand

Increasing public concerns about health risks associated with dietary intakes of cholesterol are expected to have significant impacts on the demand for foods with high fat content. This paper investigates how information about cholesterol, as measured by two newly constructed indices based on published medical research, has affected the demand for meats (beef, chicken and pork) and fish in the Nordic countries (Denmark, Finland, Norway and Sweden). To compare the effects of information across countries and over time, the demand equations for all the countries are estimated within one system, and a complete set of price and expenditure elasticities is estimated. Our findings suggest that health information has affected consumption in a healthy way in all countries studied except for Denmark. We find positive effects on the demand for chicken in Finland, Norway and Sweden and for fish in Finland and Sweden. A negative effect on the demand for beef in Sweden also is found. First version received: May 2001/Final version received: December 2001 RID="*" ID="*"  The authors would like to thank Wen S. Chern and Bj?rn Sl?en for their assistance in the construction of the health information indices. The suggestions of two anonymous referees have also been of great assistance. The EU (contract FAIRS-CT97-3373) and the Research Council of Norway (grant no. 134018/110) provided financial support for this research.”     

The stability of cigarette demand

The relative effects of various governmental interventions upon cigarette consumption is important to policy-makers. Historically, the demand for cigarettes has been quite unstable. Previous studies employ fixed parameter models and use dummy variables associated with interventions to stabilize the demand function. In contrast, we use a varying parameter model aplied to data from the United States for 1953–84 to investigate the stability of demand and show that the demand function is stabilized when dummy variables are employed. Our results suggest that industry advertising increases aggregate consumption while government interventions decrease it. However, the marginal effect of government warnings seems to be small, at least in the US: while the effect of the 1964 health warning is statistically significant, the effect of the 1979 health warning is not.     

Factors Affecting Cigarette Demand

This paper addresses the impact of smoking restrictions in workplaces and educational establishments, cigarette price measures and various psychosocial indicators on cigarette demand, controlling for demographic and socio-economic factors. The data used for the analysis are collected via questionnaire that was administered in personal-in home interviews. A two-part model of cigarette demand [Cragg, J. G. “Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods,” Econometrica, 39, 5, 1971, pp. 829–44.] is estimated. According to the estimations, cigarette price measures do not influence cigarette demand. On the contrary, smoking restrictions in workplaces and educational establishments and most of the psychosocial variables are found to affect cigarette demand considerably.     

CLEAN INDOOR AIR LAWS AND THE DEMAND FOR CIGARETTES

This paper empirically tests the effect of clean indoor air laws on smoking. Public place clean indoor air laws restrict cigarette smoking in public places such as restaurants. Private place clean air laws regulate smoking in private work places as well as in public places. This study uses a time series of cross sections of the 50 states of the United States and Washington, D.C., from 1975 through 1985, to estimate single equation and simultaneous equation models of cigarette demand. The single equation results indicate that both the public place law and the private work place law have a negative effect on cigarette demand. However, a test for endogeneity shows that the enactment of clean indoor air laws is a function of cigarette demand. Results from a simultaneous equations model indicate that the public place law has a significant negative impact on cigarette demand, while the work place law has no effect on cigarette demand. Although these results demonstrate that only states with low levels of smoking have passed work place clean air laws, the results do not imply that the level of smoking would not decrease if such a law were imposed in all states.     

Advertising media and cigarette demand

Using state-level panel data for the USA spanning three decades, this research estimates the demand for cigarettes. The main contribution lies in studying the effects of cigarette advertising disaggregated across five qualitatively different groups. Results show cigarette demand to be near unit elastic, the income effects to be generally insignificant and border price effects and habit effects to be significant. Regarding advertising effects, aggregate cigarette advertising has a negative effect on smoking. Important differences across advertising media emerge when cigarette advertising is disaggregated. The effects of public entertainment and Internet cigarette advertising are stronger than those of other media. Anti-smoking messages accompanying print cigarette advertising seem relatively more effective. Implications for smoking control policy are discussed.     

Advertising and Restrictions in the Cigarette Industry: Evidence of State-by-State Variation

Many studies estimate the relationship between advertising and consumption in the cigarette industry, with emphasis directed toward the national demand for cigarettes. However, in light of evidence that cigarette producers price discriminate across U.S. states, coupled with possible affects of advertising on market power, this article takes a less aggregate perspective by addressing the role of cigarette advertising and restrictions at the state level. The results show that although advertising has little effect on demand, it generally increases market power in the cigarette industry (particularly during periods of heightened advertising restrictions). Furthermore, the relationship between advertising, demand, and supply vary across states. (JEL L13 , L66 , I18 )     

Demand for cigarettes in Turkey: an application of count data models

Household cigarette demand in Turkey is examined using the zero-inflated negative binomial model to account for a large portion of households not reporting cigarette smoking or purchase and estimated using the data from the national household survey implemented in 2003. Data were divided into two main groups: families with and without teenagers. Results identify relevant household head and household characteristics needed to develop effective public policy to prevent the decision to begin to smoke and to reduce cigarette purchase to lower the future growth of government healthcare expenditures. Specifically, healthcare expenditure share, income, and cigarette-price elasticities are relevant in lowering cigarette purchases. The calculated price elasticities for cigarette demand falls within the range determined by studies conducted for developed countries including the member states of the European Union. An estimate of the effect of an increase in the excise tax lowering demand is provided.     

Health information and cigarette consumption: supply and spatial considerations

Assessments of the impact of health information on smoking incidence have largely been based upon estimates of the national demand for cigarettes. Yet various arguments can be made for health information also affecting the supply of cigarettes. Moreover, the effect of policy may vary spatially. Indeed, by estimating the relationship between U.S. health information, demand, and supply, at the state-level, this is found to be the case in this paper. In particular, while state-level demand has decreased in the wake of health information, supply has also weakened via decreases in competition within the industry. This suggests a potential concern for policies that promote public health yet also raise the attention of antitrust officials.     

Demand uncertainty and foreign trade in the UK tobacco industry

The concern about the potential health harzards of various tobacco products in the UK has led many tobacco companies to exploit markets in underdeveloped countries. These markets are relatively safe since the health risks of tobacco are not yet fully known. The possibility, therefore, arises that domestic producers might exploit certain markets to provide a form of profit insurance, exporting surpluses when domestic demand is unexpectedly low. This study concentrates on the UK cigarette industry. However, similar analysis could be performed for any uncertain market where a certain alternative exists that can be exploited at relatively low cost.     

Kalman filter and the demand for cigarettes

kalman filter estimates of price, income and advertising elasticities are presented. An analysis of structural change in the demand for cigarettes in the US for the period 1929–86 is made. Estimated price and income elasticities are generally smaller, and the advertising elasticity larger, than estimates previously found. Cigarette demand is inelastic with respect to price and income, and advertising elasticity is statistically insignificant for the most part. Furthermore, both income and price elasticities decline over time while advertising elasticity tends to rise. Four time periods where structural change has occurred are identified. The health scare reports and the Fairness Doctrine Act have a significant impact on per capita cigarette consumption.     

论企业社会责任中健康传播的作用及层次

健康传播是市场导向的企业承担社会责任的一个重要方面。企业主动参与健康传播,是实现企业社会责任的必要手段;从事信息大规模生产、复制及传播的媒介组织应发挥其在健康传播中的倡导和社会动员作用。在此基础上,明确了企业社会责任对应的健康传播层次。第一,预防职业性危害,提供高品质的产品和服务,广告的信息合乎医学;第二,道德贸易;第三,支持和捐助公益事业与人类健康医疗卫生相关的个体和组织机构。     

KINKED DEMAND CURVE THEORY AND THE MICRO FOUNDATIONS OF KEYNESIAN INVOLUNTARY UNEMPLOYMENT

This paper presents a macroeconomic model in which firms have kinked demand schedules owing to asymmetries in the dissemination of price information amongst consumers. It is then shown that nominal wage reductions may be unable to increase employment, let along secure full employment. The necessary condition is that the lower branch of the kinked marginal revenue schedule be negative. In this case, prices are unresponsive to nominal wage declines, and there is no Pigou effect from lower nominal wages.