Smokeless tobacco,smoking cessation and harm reduction: an economic analysis

Good estimates place ‘hard core’ smoking rates in the United States at approximately 25%, with little change over the decade of the 1990s. This paper examines the possibilities of ‘harm reduction’ with the use of smokeless tobacco. Specifically, using an econometric model we seek to determine whether an increase in the use of smokeless tobacco would lead to reduced smoking rates in the United States. Applying our model to the NHANES III (National Health and Nutrition Examination Survey) we find that the use of smokeless tobacco by an average U.S. male smoker would increase the average probability of smoke cessation by over 10%. Approximately 3 million additional ‘quits’ would result for 26 million smokers. Our study permits an examination of cessation by age groups and we find that males who use smokeless tobacco between 16 and 65 have a 10–14% probability of quitting but that the probability falls beyond age 66. Important implications for life extension and health costs would attend these results with, under conservative assumptions, life years saved approximating 2.16 million and health care cost-savings of about $3 billion per year.     

Impacts of meat product recalls on consumer demand in the USA

The impact of meat product recall events on consumer demand (beef, pork, poultry, and other consumption goods) in the USA is tested empirically. Beef, pork, and poultry recall indices are constructed from both the Food Safety Inspection Service's meat recall events and from newspaper reports over the period 1982–1998. Following previous product recall studies, recall indices are incorporated as shift variables in consumers’ demand functions. Estimating an absolute price version of the Rotterdam demand model, findings indicate that Food Safety Inspection Service's meat recall events significantly impact demand, and newspaper reports do not. Moreover, although elasticities related to recall events are significant they are small in magnitude relative to price and income effects. Any favourable effects on the demands of meat substitutes for a recall are offset by a more general negative effect on meat demand. The general negative effect indicates a shift out of meat to non-meat consumption goods.     

Diversified growth and competition: the experience of twelve large UK firms

This paper looks at the causes and competitive consequences enterprise diversification with reference to the experience of twelve large UK firms. It is noted although the majority of these firms diversified intially for defensive reasons, continuing diversification was often undertaken to enable the firm to maintain a satisfactory rate of earnings growth. In accordance with this goal, most of the twelve firms had acquired market leaders in diverse areas. A second conclusion therefore, is that diversification can add to the total market power available to the firm. The use of this power however, appears to depend upon the management philosophy and nature of resource allocation found within the firm.     

The behaviour of expected short-term real interest rates in the UK

The existence of persistent technical inefficiency offers the opportunity for a ‘free lunch’ not typically implied by the neoclassical theory of the firm. When external effects are related to the use of particular inputs, reduction of persistent technically inefficient levels of input use represents a means of reducing external impacts. An important example is found in agriculture where substantial environmental impacts are generated by particular inputs. Within this context, this paper considers the usefulness of data envelopment analysis (DEA) for estimation of potential input reductions and assessment of potential reductions of environmental impacts of agricultural inputs. An application for French cereal production provides estimates that indicate that substantial potential exists for reduction of input use and environmental impacts.     

Numeraire choice in normalized quadratic functional forms

A semi-nested test procedure is developed for choosing the numeraire for a normalized quadratic profit function when too few observations exist for nested hypothesis testing and when too many alternatives exis for conventional non-nested testing. Sensitivity of empirical results to choice of numeraire price is examined using agricultural data for the US and ten multistate regions. Few test conclusions vary by numeraire but own price input demand elasticities differ greatly.     

Market structure and corporate charitable donations: some Canadian evidence for 1976 and 1981

The business of business, not charity.

Say eleemosynary its more confusing.

Whatever, as long as we don't given 'em any cash.

Harv Antione, ‘The Buzz Words of Entrepreneurship’

in Apocryphal Northern Tales

This paper investigates the general determinants of corporate charitable donations in Canada and, in particular, the impact of imperfectly-competitive market structure. We utilize a profit-maximizing model and assume that charitable donations occur only if, by performing an advertising/public relations function, they increase revenue; or if, by acting as a fringe benefit, they result in a reduction in wage costs. In this context, because only firms in imperfect markets generate the rents from which donations can be made, we anticipate a positive relationship between donations and a measure of imperfect competition (concentration). The data is a cross-section sample of 38, 3- and 4-digit SIC manufacturing industries pooled for 1976 and 1981. The major findings are that: the results are generally compatible with the predictions of the model; concentration is a significant determinant of donations although non-linear; the cost of giving (the tax rate) is appropriately positive; and there are significant negative relationships for measures of foreign ownership and wage rates.