Effect of advertising on cigarette consumption
There are two different views about the impact of cigarette advertising on cigarette consumption. Thetobacco industry argues that tobacco is a mature industry, and thus advertising affects only the marketshare of advertised brands and has no impact on aggregate demand for cigarettes. In comparison, thepublic health community argues that advertising has a positive effect on demand for cigarettes.Advertising is particularly effective in recruiting young smokers.The effect of cigarette advertising on cigarette consumption has been examined in three differentways:
(1) examining the impact directly, using either annual or quarterly national aggregateexpenditure over time or using cross sectional data;
(2) investigating the impact of an advertising banon demand for cigarettes; and
(3) studying the effect of counter advertising on smoking.
Studies that examined the impact of advertising on cigarette consumption. Studies that used the aggregated data generallyfound at most a small effect of advertising on cigarette demand. Studies using cross sectional dataconcluded that advertising had a significant positive effect on consumption, which increased both themarket share of the advertised brand and the market size of cigarettes in general. Studies on the effectof advertising bans yielded an inconclusive result and those on counter advertising found that counteradvertising reduced cigarette consumption. Saffer and Chaloupka (1999) evaluated the impact ofadvertising bans using data between 1970 and 1992 for 22 OECD countries and concluded that acomprehensive set of tobacco advertising bans can reduce cigarette consumption and a limited set oftobacco advertising will have little or no effect. They estimated that cigarette consumption would fallby 6.3 percent if all 22 OECD countries had comprehensive bans.
(1) examining the impact directly, using either annual or quarterly national aggregateexpenditure over time or using cross sectional data;
(2) investigating the impact of an advertising banon demand for cigarettes; and
(3) studying the effect of counter advertising on smoking.
Studies that examined the impact of advertising on cigarette consumption. Studies that used the aggregated data generallyfound at most a small effect of advertising on cigarette demand. Studies using cross sectional dataconcluded that advertising had a significant positive effect on consumption, which increased both themarket share of the advertised brand and the market size of cigarettes in general. Studies on the effectof advertising bans yielded an inconclusive result and those on counter advertising found that counteradvertising reduced cigarette consumption. Saffer and Chaloupka (1999) evaluated the impact ofadvertising bans using data between 1970 and 1992 for 22 OECD countries and concluded that acomprehensive set of tobacco advertising bans can reduce cigarette consumption and a limited set oftobacco advertising will have little or no effect. They estimated that cigarette consumption would fallby 6.3 percent if all 22 OECD countries had comprehensive bans.
