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Article Excerpt
Abstract
This paper addresses the impact of smoking restrictions in workplaces and educational establishments, cigarette price measures and various psychosocial indicators on cigarette demand, controlling for demographic and socio-economic factors. The data used for the analysis are collected via questionnaire that was administered in personal-in home interviews. A two-part model of cigarette demand [Cragg, J. G. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, 39, 5, 1971, pp. 829-44.] is estimated. According to the estimations, cigarette price measures do not influence cigarette demand. On the contrary, smoking restrictions in workplaces and educational establishments and most of the psychosocial variables are found to affect cigarette demand considerably. (JEL D12, I00, M31)
Introduction
Consumers make rational and informed choices after weighting the costs and benefits of purchases, and compromising all the costs of choice according to the principle of consumer sovereignty. Thus, smokers perceive benefits from smoking, such as pleasure and the avoidance of withdrawal, that outweigh the perceived costs.
However, the decision to smoke differs from the decision concerning the consumption of other goods. Many smokers are not fully informed or underestimate the high risks of disease and premature death, which their choice entails. There is a delay between smoking initiation, smoking addiction and tobacco related diseases, and tobacco industry disguises the information on the health risks of smoking. Most smokers become addicted to tobacco in adolescence or early adulthood and even when are informed on smoking risks, they do not always have the capacity to make sound decisions. In addition, smoking imposes costs on non-smokers, such as direct physical costs (health impacts due to passive smoking), financial costs (tobacco related public health care costs) and 'caring externalities' (emotional suffering of non-smokers due to the illness and death of smokers) [Pan American Health Organization, 2000; Wilkins et al., 2001]. Therefore, "the existence of internal costs (in the form of harm to smokers themselves) and external costs (in the form of harm to others) justifies both government intervention and research on the effects and benefits of alternative policies to limit demand of addictive substances such as tobacco [Wilkins et al., 2001]."
The aim of the present study is to investigate the impact of smoking restrictions in workplaces and educational establishments, cigarette price measures and psychosocial factors on cigarette demand controlling for various demographic and socio-economic variables. The main reason to analyze cigarette demand is to examine how cigarette demand is determined, which factors affect it and the direction of their influence.
This study comprises four sections, and it is structured as it follows. The first section briefly presents the main outcomes of other researches on cigarette demand. The next section includes the methods employed for the analysis, and more specifically describes the data and settings, the variables used in the econometric analysis, and the model applied. The following section elucidates the factors that are found to affect smoking behavior, and the last section comments on these estimations and compares them with the outcomes of other researches.
Previous Studies
Smoking related issues have been of great interest for econometric analyses for many years. An increasing number of studies on cigarette demand use data from individual level surveys and most of these studies deal with price responsiveness of cigarette smoking. Chaloupka and Warner [1999] give an analytical report of the price elasticities of demand, which are estimated in the most recent studies.
With respect to price responsiveness among different age groups, adolescents are found to be more sensitive to cigarette price than adults concerning mainly smoking participation rather than cigarette consumption [Lewit et al., 1981; Grossman et al., 1983; Chaloupka and Grossman, 1996; Chaloupka and Wechsler, 1997; Tauras and Chalpoupka, 1999; Hersch, 2000; Emery et al., 2001; Ross and Chaloupka, 2003]. Regarding the decision to smoke, it was found that young adults are more price-sensitive than older ones [Lewit and Coate, 1982]. In addition, Farrelly and his colleagues [1998] estimated that young adults are more price-sensitive than the full sample of young and older adults.
In opposition to the above-mentioned researches, Chaloupka in his 1991, 1992 publications presumed that cigarette price increase reduces cigarette consumption but this increase is understated if addiction is ignored. Chaloupka found young adults to be less price-sensitive than older ones supporting the results of Wasserman and his colleagues [1991] who calculated insignificant effects of cigarette prices on cigarette consumption by adolescents.
Another research topic on smoking concerns of whether or not smoking restrictions in public places and in private workplaces have negative effects on cigarette consumption. Such studies deduced that these restrictions have a negative impact on adult cigarette consumption [Chaloupka, 1992; Chaloupka and Wechsler, 1997; Evans et al., 1999; Tauras and Chalpoupka, 1999]. With respect to youth smoking, Chaloupka and Grossman [1996] asserted that strong restrictions on smoking in public places would reduce the smoking prevalence among adolescents. Other studies support that smoking restrictions in public places and in private worksites do not affect youth cigarette demand [Emery et al., 2001; Ross and Chaloupka, 2003].
While most of the econometric studies analyze the effect of cigarette price and anti-smoking regulations on cigarette demand, only a few of them take into account psychosocial variables. Emery et al. [2001] examined adolescents' smoking patterns and concluded that the psychosocial variables are strongly associated with cigarette smoking in the expected directions. Thus, poor school performance, rebelliousness, exposure, depression, and belief that cigarettes are easy to get are positively associated with smoking behavior. On the other hand, participating in sports and strong parental bond are negatively associated with smoking behavior.
Even though smoking rates seem to decrease in most of the developed countries [World Bank Report, 1999], smoking consumption in Greece increased from 2,864 cigarettes per capita in 1990 to 3,020 in 1997 [Eurostat Yearbook, 2001]. The first anti-smoking policies were enforced during 1979-1982 and have been improved since then to focus on the consequences of smoking in public health and its insurance. According to the Government...
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