Private Profits and Public Health: Does Advertising Smoking Cessation Products Encourage Smokers to Quit?

45 Pages Posted: 13 Apr 2006 Last revised: 16 Aug 2010

See all articles by Rosemary J. Avery

Rosemary J. Avery

Cornell University - Department of Policy Analysis and Management

Donald Kenkel

Cornell University - Department of Policy Analysis & Management (PAM); National Bureau of Economic Research (NBER)

Dean Lillard

Cornell University - Department of Policy Analysis & Management (PAM)

Alan D. Mathios

Cornell University - Department of Policy Analysis & Management (PAM)

Date Written: January 2006

Abstract

To shed new light on the role private profit incentives play in promoting public health, in this paper we conduct an empirical study of the impact of pharmaceutical industry advertising on smoking cessation decisions. We link survey data on individual smokers with an archive of magazine advertisements. The rich survey data allow us to measure smokers' exposure to smoking cessation advertisements based on their magazine-reading habits. Because we observe the same information about the consumers that the advertisers observe, we can control for the potential endogeneity of advertising due to firms' targeting decisions. We find that when smokers are exposed to more advertising, they are more likely to attempt to quit and are more likely to have successfully quit. While some of the increased quitting behavior involves purchases of smoking cessation products, our results indicate that advertisements for smoking cessation products also increase the probability of quitting without the use of any product. Thus, the public health returns to smoking cessation product advertisements exceed the private returns to the manufacturers. Because advertising of a wide range of consumer products may have important and under-studied spillover effects on various non-market behaviors, our results have broad implications for the economics of advertising.

Suggested Citation

Avery, Rosemary J. and Kenkel, Donald and Lillard, Dean and Mathios, Alan D., Private Profits and Public Health: Does Advertising Smoking Cessation Products Encourage Smokers to Quit? (January 2006). NBER Working Paper No. w11938. Available at SSRN: https://ssrn.com/abstract=876040

Rosemary J. Avery

Cornell University - Department of Policy Analysis and Management ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY
United States
607-255-2578 (Phone)
607-255-4071 (Fax)

Donald Kenkel (Contact Author)

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States
607-255-2594 (Phone)
607-255-4071 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dean Lillard

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States

Alan D. Mathios

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States
607-255-2589 (Phone)
607-255-0799 (Fax)

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