Economics of Tobacco Sales :: Economics Essays

H1 States with Smoking Bans and Cigarette SalesEach year 440,000 people die, in the United States alone, from the effects of pansy take in (American Cancer Society, 2004). As discussed by Scheraga & Calfee (1996) as early as the 1950s the U.S. government has utilized several methods to curb the incidence of smoking, from fear advertizing to published health warnings. Kao & Tremblay (1988) and Tremblay & Tremblay (1995) agreed that these early interventions by the U.S. government were instrumental in the diminution of the national demand for tail ends in the United States. In much recent years, state governments have joined in the battle against smoking by introducing antismoking regulations. In a research article by Gallet (2004), several aspects of the pick indoor-air laws were closely examined. Set apart from other literature on the same topic, Gallet (2004) proposed that the degree of enforcement of these laws was just as important as the laws themselves. States that maintai ned the most repressive clean-air laws encouraged much more competition within the cigarette industry hence prices were adjusted closer to marginal cost which caused the availability of supply to augment (Gallet, 2004). Conversely, Keeler, Barnett, Manning, & Sung (1996) concluded that the price adjustment closer to marginal demand could be explained as an attempt to compensate for the reduction of demand caused by the antismoking laws. unheeding of the opinions of the papers on this aspect of the clean indoor-air laws, both agreed that state regulations that prohibit or limit smoking in public places decreased the cigarette demand. Extraneous variables, excluding state smoking restrictions, may influence state cigarette sales. State cigarette sales may be influenced by bootlegging, identified as the crossing of state lines to purchase cigarettes in a state that sells cigarettes at a less expensive price (Gallet, 2004 Meier & Licari, 1997). Gallet (2004) identified bootlegging as Nprice, or the minimum neighbor state price ($). As stated previously, Gallet (2004) examined not only states with clean indoor-air laws, Clean1, but also the degree to which these laws were enforced within the someone states, Clean2. The consensus of the reviewed literature, those both including and excluding the extraneous variable, found that the institutions of state smoking bans affect cigarette sales.DiscussionThe results of this study are consistent with the overall literatures findings (Gallet, 2004 Meirer & Licari, 1997) that states with smoking bans have a decrease in cigarette sales. However, caution is warranted in the true reliability of the data presented in this study, because of the nature of the data.