Abstract

http://ssrn.com/abstract=2042296
 


 



Will Plain Packaging Reduce Cigarette Consumption?


Harry Clarke


La Trobe University

David Prentice


School of Economics, La Trobe University

April 18, 2012


Abstract:     
The Australian Parliament has passed legislation compelling tobacco products to be sold in “plain packaging”. This paper reviews this legislation and its likely effects on prices, market structure in the tobacco industry and on smoking behaviour. Industry changes following two previous sets of restrictions on advertising are examined for relevant empirical evidence. Without offsetting tax increases the legislation will plausibly reduce prices but significant entry into the industry and greater consumption of counterfeit/illegal cigarettes are unlikely. Provided that tax increases offset any induced fall in prices that might result, plain packaging will reduce cigarette consumption.

Number of Pages in PDF File: 25

Keywords: Cigarettes, Plain Packaging, Competition, Concentration, Advertising, Entry, Exit

JEL Classification: I18, K2, K32, L11, L13, L66, M37

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Date posted: April 19, 2012  

Suggested Citation

Clarke, Harry and Prentice, David, Will Plain Packaging Reduce Cigarette Consumption? (April 18, 2012). Available at SSRN: http://ssrn.com/abstract=2042296 or http://dx.doi.org/10.2139/ssrn.2042296

Contact Information

Harry Clarke
La Trobe University ( email )
Victoria 3552, 3086
Australia
David Prentice (Contact Author)
School of Economics, La Trobe University ( email )
Bundoora, Victoria 3086
Australia
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