The economic value to smokers of graphic warning labels on cigarettes: Evidence from combining market and experimental auction data

Matthew Rousu, Stéphan Marette (), James F. Thrasher and Jayson Lusk

Journal of Economic Behavior & Organization, 2014, vol. 108, issue C, 123-134

Abstract: Many countries now require prominent pictorial health warning labels (HWLs) on the front and back of cigarette packages. In the US, pictorial HWLs have been adopted, but tobacco industry litigation has delayed their implementation. This intervention could have value to smokers, if it increases their information and changes their smoking behavior. In this paper we estimate the value of two different health warning labels for cigarette packages relative to the current US labeling policy. Our methodology does not depend on the personal values of policy makers or other individuals, as the value of information estimates we derive are based solely on smokers’ own consumption choices, not any public health or other effects. We introduce an approach to valuing information with a surplus measure that couples willingness-to-pay from non-hypothetical experimental auctions with time-series revealed preference demand estimates. We find that a pictorial HWL has a large value to smokers, and a higher value than a label that only contains text, insofar as changing purchase behavior.

Keywords: Experimental auctions; Cigarette labels; Value of information; Field experiments (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Working Paper: The economic value to smokers of graphic warning labels on cigarettes: evidence from combining Mmarket and experimental auction data (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:108:y:2014:i:c:p:123-134

DOI: 10.1016/j.jebo.2014.09.003

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