Abstract:
Irrational behavior of individuals as well as social externalities can justify specific regulations towards tobacco consumption. The article argues that individual self-control problems have been largely neglected in economics, whereas externalities resulting from tobacco consumption are exaggerated. Given this result the article concludes that smoking bans are not an effective instrument to internalize the problems of tobacco consumption. Instead an increase of the tobacco tax would be a useful instrument to protect children and - to a lesser extent - lower-class households from excessive tobacco consumption. Copyright 2009 die Autoren Journal compilation 2009, Verein für Socialpolitik und Blackwell Publishing Ltd.