Table of Contents 1. Introduction and overview 1.1 Coverage 1.1 Health consequences of tobacco consumption 2. The impact of price on the demand for tobacco products 2.1 Conventional studies of cigarette demand 2.1.1 Analysis of aggregate data 2.1.2 Analysis of individual level data 2.2 Addiction models and cigarette demand 2.2.1 Imperfectly rational addiction models 2.2.2 Myopic addiction models 2.2.3 Rational addiction models 2.2.4 Critiques of the rational addiction model 2.3 Behavioral economic analyses of cigarette demand 2.4 Econometric studies of the demand for other tobacco products 3. Cigarette and other tobacco taxation 3.1 Comparative standards and the effects of tax on price 3.1.1 Purposes and methods of taxation 3.1.2 Effects of taxes on retail price 3.1.3 Variations in cigarette tax across countries and states and the issue of smuggling 3.2 Fairness standards 3.2.1 Horizontal and vertical equity 3.2.2 The benefit principle 3.3 Public health standards 3.3.1 The social cost of smoking 3.3.2 The health benefits of increasing cigarette taxes 3.4 Economic efficiency and the pursuit of an optimal cigarette tax 3.4.1 Negative externalities associated with smoking 3.4.2 Other efficiency considerations 4. Advertising, promotion, and the demand for tobacco products 4.1 Theoretical and conceptual issues 4.2 Econometric evidence 4.3 Findings from the non-economic literature 5. Other tobacco control policies and demand 5.1 Health information and counter-advertising 5.2 Restrictions on cigarette smoking 5.3 Limits on youth access to tobacco products 6. Agricultural policy and the macroeconomic implications of tobacco 6.1 Size and nature of the tobacco industry 6.1.1 The global industry 6.1.2 The U.S. tobacco industry 6.2The impact of the U.S. tobacco agriculture regulatory system 6.2.1 Nature of the system and its impact on tobacco farming 6.2.2 Relevance of the tobacco program to smoking and health 6.3The contribution of the tobacco industry to the economy 6.3.1 States and nations 6.3.2 Tobacco farm communities
Conclusion ReferencesEconomics of Smoking -p. 13 Concern about the health consequences of smoking predates the "modern era" by nearly four centuries. In 1604, for example, King James I of England lambasted smoking as "a custome lothsome to the eye, hatefull to the Nose, harmefull to the braine, dangerous to the Lungs, and in the blacke stinking fume thereof, neerest resembling the horrible Stigian smoke of the pit that is bottomlesse" (as quoted in Sullum, 1998, p. 18). King James subsequently raised the tax on tobacco by 1000%, deriving significant revenues for his coffers. This illustrates the profound dilemma that has confronted policy decision makers ever since: whatever its health consequences, tobacco has long been truly a "golden leaf" for farmers and politicians alike. Its role in the very earliest commerce between England and the American colonies is legendary, as is its role in contemporary politics (Taylor, 1984;Fritschler and Hoefler, 1996).Economics of Smoking -p. 4 million adults, almost a qu...