Business

By JERRY HEASTER Columnist
Date: 07/10/97 19:54

The strategy in the war against smoking is apparently based on invalid assumptions.

Antismoking strategists assume that if advertising is restricted and prices increased, smoking will decline. A recent analysis by the Center for the Study of American Business, however, offers convincing evidence to the contrary. The proof abounds both at home and abroad, according to the study by Dwight R. Lee, a University of Georgia economics professor and an adjunct fellow of the Washington University think tank in St. Louis.

While big increases in cigarette taxes by some states have reduced reported sales wherever imposed, the resulting rises in price failed to reduce smoking levels. In some instances smoking actually increased, as did smuggling and legal sales in nearby states with lower taxes.

After Michigan boosted its excise tax from 25 cents to 75 cents three years ago, cigarette smuggling soared. Although legal sales plummeted by 30 percent, a study by the Centers for Disease Control and Prevention showed that smoking increased 0.5 percent. The aftermath also showed states within a day's drive of Michigan registered cigarette sales increases ranging from 4.5 percent to 12 percent.

Maryland, California and New York also experienced the combination of legal sales declines and increased smoking after raising cigarette taxes.

Lee's study also said Canada recently cut cigarette taxes significantly in response to increased smuggling. Since Canada began raising taxes in the mid-1980s to discourage smoking, contraband cigarettes had come to represent a market share estimated at from 30 percent to 50 percent. Canadian officials also acknowledged that the growing black market made it more difficult to control access to cigarettes by teen-agers.

As for advertising curbs, Lee cited the failures of extremely strict initiatives in several foreign countries as examples of this strategy's futility. In Finland, for instance, teen-age smoking was declining before passage of a national ban on all tobacco advertising in 1978. Teen smoking began to rise after the ban was imposed.

Adolescent smoking also increased in Sweden and Australia after similar advertising bans in 1979 and 1992 respectively. Norway has had a blackout on tobacco ads since 1975 with no effect on teen smoking rates, Lee's study shows.

The probable explanation for such a paradox, he said, is the "tendency of young people to rebel against what they see as restrictions on their independence." He theorizes that transforming smoking into "forbidden fruit" actually enhances its appeal among adolescents.

Just as advertising restrictions have little or no effect in discouraging smoking, Lee's study also contends that cigarette advertising doesn't convert nonsmokers to smokers. Cigarette marketing, he says, is designed primarily to get smokers to switch from one brand to another.

The lesson of such real-world experience is that government's crusade against tobacco isn't likely to have much effect on smoking. People start and stop smoking for many reasons, none of which have anything to do with government raising taxes on cigarettes or spending billions to tell people what they already know -- i.e., smoking is bad for you.

Don't expect this to stop the crusade, though. This exercise in cynicism is driven more by money than public health concerns.

Jerry Heaster's column appears Wednesday, Friday, Saturday and Sunday. To share a comment, call (816) 889-7827 and enter 2301. Send e-mail, including a telephone number, to jheaster@kcstar.com.

Business

By JERRY HEASTER Columnist
Date: 07/10/97 19:54

The strategy in the war against smoking is apparently based on invalid assumptions.

Antismoking strategists assume that if advertising is restricted and prices increased, smoking will decline. A recent analysis by the Center for the Study of American Business, however, offers convincing evidence to the contrary. The proof abounds both at home and abroad, according to the study by Dwight R. Lee, a University of Georgia economics professor and an adjunct fellow of the Washington University think tank in St. Louis.

While big increases in cigarette taxes by some states have reduced reported sales wherever imposed, the resulting rises in price failed to reduce smoking levels. In some instances smoking actually increased, as did smuggling and legal sales in nearby states with lower taxes.

After Michigan boosted its excise tax from 25 cents to 75 cents three years ago, cigarette smuggling soared. Although legal sales plummeted by 30 percent, a study by the Centers for Disease Control and Prevention showed that smoking increased 0.5 percent. The aftermath also showed states within a day's drive of Michigan registered cigarette sales increases ranging from 4.5 percent to 12 percent.

Maryland, California and New York also experienced the combination of legal sales declines and increased smoking after raising cigarette taxes.

Lee's study also said Canada recently cut cigarette taxes significantly in response to increased smuggling. Since Canada began raising taxes in the mid-1980s to discourage smoking, contraband cigarettes had come to represent a market share estimated at from 30 percent to 50 percent. Canadian officials also acknowledged that the growing black market made it more difficult to control access to cigarettes by teen-agers.

As for advertising curbs, Lee cited the failures of extremely strict initiatives in several foreign countries as examples of this strategy's futility. In Finland, for instance, teen-age smoking was declining before passage of a national ban on all tobacco advertising in 1978. Teen smoking began to rise after the ban was imposed.

Adolescent smoking also increased in Sweden and Australia after similar advertising bans in 1979 and 1992 respectively. Norway has had a blackout on tobacco ads since 1975 with no effect on teen smoking rates, Lee's study shows.

The probable explanation for such a paradox, he said, is the "tendency of young people to rebel against what they see as restrictions on their independence." He theorizes that transforming smoking into "forbidden fruit" actually enhances its appeal among adolescents.

Just as advertising restrictions have little or no effect in discouraging smoking, Lee's study also contends that cigarette advertising doesn't convert nonsmokers to smokers. Cigarette marketing, he says, is designed primarily to get smokers to switch from one brand to another.

The lesson of such real-world experience is that government's crusade against tobacco isn't likely to have much effect on smoking. People start and stop smoking for many reasons, none of which have anything to do with government raising taxes on cigarettes or spending billions to tell people what they already know -- i.e., smoking is bad for you.

Don't expect this to stop the crusade, though. This exercise in cynicism is driven more by money than public health concerns.

Jerry Heaster's column appears Wednesday, Friday, Saturday and Sunday. To share a comment, call (816) 889-7827 and enter 2301. Send e-mail, including a telephone number, to jheaster@kcstar.com.