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Will Plain Packaging Reduce Cigarette Consumption?

Harry Clarke () and David Prentice

No 2012.03, Working Papers from School of Economics, La Trobe University

Abstract: The Australian Parliament has passed legislation compelling tobacco products to be sold in ?plain packaging?. This paper reviews this legislation and its likely effects on prices, market structure in the tobacco industry and on smoking behaviour. Industry changes following two previous sets of restrictions on advertising are examined for relevant empirical evidence. Without offsetting tax increases the legislation will plausibly reduce prices but significant entry into the industry and greater consumption of counterfeit/illegal cigarettes are unlikely. Provided that tax increases offset any induced fall in prices that might result, plain packaging will reduce cigarette consumption.

Keywords: Cigarettes; Plain Packaging; Competition; Concentration; Advertising; Entry; Exit (search for similar items in EconPapers)
JEL-codes: I18 K2 K32 L11 L13 L66 M37 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012
New Economics Papers: this item is included in nep-hea
Note: ISSN-1837-2198
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http://www.latrobe.edu.au/__data/assets/pdf_file/0009/208575/2012.03.pdf (application/pdf)

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