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Estimating the Impact of Food and Drug Administration Regulation of Cigarette Package Warning Labels and the Potential Added Impact of Plain Packaging: Evidence From Experimental Auctions Among Adult Smokers

James F. Thrasher, Matthew Rousu (), David Hammond, Ashley Navarro and Jay Corrigan ()

No 103169, 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania from Agricultural and Applied Economics Association

Abstract: Objective: To estimate differences in demand for cigarette packages with different packaging and health warning label formats. Methods: Adult smokers (n=404) in four states participated in experimental auctions. Participants bid on two of four experimental conditions, each involving a different health warning label format but with the same warning message: 1. text on 50% of pack side; 2. text on 50% of the pack front and back; 3. text with a graphic picture on 50% of the pack front and back; and 4. same as previous format, but without brand imagery. Results: Mean bids decreased across conditions (1. $3.52; 2. $3.43; 3. $3.11; 4. $2.93). Bivariate and multivariate random effects models indicated that there was no statistically significant difference in demand for packs with either of the two text only warnings; however, demand was significantly lower for both packs with prominent pictorial warnings, with the lowest demand associated with the plain, unbranded pack. Conclusions: Results suggest that prominent health warnings with graphic pictures will reduce demand for cigarettes. Regulators should not only consider this type of warning label, but also plain packaging policies for tobacco products.

Keywords: experimental auctions; cigarette labels; grotesque images; Food Consumption/Nutrition/Food Safety; Health Economics and Policy; C93 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-exp, nep-hme and nep-reg
Date: 2011
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