The Welfare Effect of Advertising Restrictions in the U.S. Cigarette Industry

The Welfare Effect of Advertising Restrictions in the U.S. Cigarette Industry The welfare effect of advertisingrestrictions in the U.S. cigarette industry dependsupon the impact of advertising on consumer and producer surplus, the transfer to consumers for being exposed to utility-reducing advertising, and smoking externalities. We estimate a demand equation and a supply relation simultaneously and use the parameter estimates to generate predictions of the impact of advertising restrictions on social welfare. Our results show that advertising restrictions benefit producers by limiting competition and generating higher industry profits, and such restrictions lower social welfare if the external cost of cigarette smoking is sufficiently low. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Welfare Effect of Advertising Restrictions in the U.S. Cigarette Industry

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1007801608741
Publisher site
See Article on Publisher Site

References

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