Optimality and distortionary lobbying: regulating tobacco consumption

Luca Colombo and Umberto Galmarini ()
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Umberto Galmarini: Università dell’Insubria

No 2015/2, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We examine policies directed at regulating tobacco consumption through three types of instruments: (i) an excise tax hindering consumption by increasing the price of cigarettes, (ii) prevention programs helping consumers to make choices that are more time consistent when trading-off the current pleasure from smoking and its future health harms, and (iii) smoking bans directly restricting consumption. First, on normative grounds, we focus on the optimal design of public policies maximizing the economy’s surplus. Second, in a positive perspective, we investigate how the lobbying activities of the tobacco industry, of smokers, and of anti-tobacco organizations may distort government intervention.

Keywords: Harmful consumption; Corrective taxation; Lobbying in common agency games (search for similar items in EconPapers)
JEL-codes: D72 H23 I18 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2015
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