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The effect of the 1971 advertising ban on behavior in the cigarette industry

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  • Craig A. Gallet

    (Department of Economics, College of Business Administration, University of Central Florida, Orlando, FL, USA)

Abstract

The 1971 ban on TV and radio advertising of cigarettes offers a unique opportunity to uncover the industry response to a change in the mix of advertising. Following the ban, advertising expenditures were shifted away from TV and radio towards print media. Accounting for the impact of this event within a supply and demand framework, the empirical results show that advertising had an insignificant effect on demand during the pre- and post-1971 periods; however, advertising did stimulate competition in the industry prior to the 1971 ban. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • Craig A. Gallet, 1999. "The effect of the 1971 advertising ban on behavior in the cigarette industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 299-303.
    • Handle: RePEc:wly:mgtdec:v:20:y:1999:i:6:p:299-303
    DOI: 10.1002/(SICI)1099-1468(199909)20:6<299::AID-MDE942>3.0.CO;2-8
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    References listed on IDEAS

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    1. Schneider, Lynne & Klein, Benjamin & Murphy, Kevin M, 1981. "Governmental Regulation of Cigarette Health Information," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 575-612, December.
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    Cited by:

    1. Goel, Rajeev K. & Payne, James E. & Saunoris, James W., 2016. "Spillovers from the beer market to U.S. cigarette demand," Economic Modelling, Elsevier, vol. 55(C), pages 292-297.
    2. Shilpi Bihari & Barry Seldon, 2006. "The Effect of Government Advertising Policies on the Market Power of Cigarette Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(3), pages 201-229, May.
    3. Caroline Elliott & Yingqi Wei & Pamela Lenton, 2010. "The Effect Of Government Policy On Tobacco Advertising Strategies," Bulletin of Economic Research, Wiley Blackwell, vol. 62(3), pages 243-258, July.
    4. Natsuko Iwasaki & Victor Tremblay, 2009. "The effect of marketing regulations on efficiency: LeChatelier versus coordination effects," Journal of Productivity Analysis, Springer, vol. 32(1), pages 41-54, August.
    5. Harold Mulherin, J., 2007. "Measuring the costs and benefits of regulation: Conceptual issues in securities markets," Journal of Corporate Finance, Elsevier, vol. 13(2-3), pages 421-437, June.
    6. Nelson, Jon P., 2006. "Cigarette advertising regulation: A meta-analysis," International Review of Law and Economics, Elsevier, vol. 26(2), pages 195-226, June.
    7. Craig A. Gallet, 2003. "Advertising and Restrictions in the Cigarette Industry: Evidence of State‐by‐State Variation," Contemporary Economic Policy, Western Economic Association International, vol. 21(3), pages 338-348, July.

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