Cigarette Advertising and U.S. Cigarette Demand: A Policy Assessment

Journal of Policy Modeling, Vol. 31, No. 3, pp. 351-357, 2009

Posted: 19 Apr 2016

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

Date Written: 2009

Abstract

The effect of advertising on cigarette demand has been widely studied. Yet the demand-advertising nexus is not completely understood and there is little consensus in the literature. This paper sheds new light on the issue by examining the relationship using state-level data for the United States over three decades. Additional contributions include examining the effects of the Master Settlement Agreement, and studying the dynamic effects of advertising and smoking. Findings show that U.S. cigarette demand is inelastic, the income effects are mixed, advertising elasticities are relatively small, post-MSA advertising seems smoking-reducing and that the full effects of the MSA are probably still unfolding. Smoking habits tend to linger, while the effects of antismoking messages accompanying cigarette advertisements take time to be effective. Policy implications are discussed.

Suggested Citation

Goel, Rajeev K., Cigarette Advertising and U.S. Cigarette Demand: A Policy Assessment (2009). Journal of Policy Modeling, Vol. 31, No. 3, pp. 351-357, 2009. Available at SSRN: https://ssrn.com/abstract=2766703

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

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