The Effect of Changes in Alcohol Tax Differentials on Alcohol Consumption.

We show that tax-induced increases in alcohol prices can lead to substantial substitution and avoidance behavior that limits reductions in alcohol consumption. Causal estimates are derived from a natural experiment in Illinois where spirits and wine taxes were raised sharply and unexpectedly in 2009. Beer taxes were increased by only a trivial amount. We construct representative and consistent measures of alcohol prices and sales from scanner data collected for hundreds of products in thousands of stores across the US. Using several difference-in-differences models, we show that alcohol excise taxes are instantly over-shifted. That is, a $1 tax increase translates into a price increase of up to $1.50. We find evidence suggesting that consumers react by switching to less expensive products. In particular, they increase purchases of beer, thus significantly moderating any tax-induced reductions in total ethanol consumption. Our study highlights the importance of tax-induced substitution, the implications of differential tax increases by beverage group and the impacts on public health of alternative types of tax hikes whose main aims are to increase revenue.

Association of e-cigarette advertising with e-cigarette and cigarette use among US adults.

AIMS: To estimate the association of e-cigarette advertisement exposure with e-cigarette and cigarette use behavior among US adults. DESIGN: Data from the 2013-14 National Adult Tobacco Survey (NATS) were linked to Kantar Media and National Consumer Study data to construct measures of e-cigarette advertisements on TV and in magazines. The relationship between advertisement measures and outcomes was estimated using logistic and Poisson regressions, controlling for socio-demographics, state cigarette taxes and state and year fixed-effects. SETTING: United States. PARTICIPANTS/CASES: A total of 98 746 adults aged ≥ 18 years who responded to the 2013-14 NATS. MEASUREMENTS: The independent variables of interest were the number of e-cigarette advertisements in magazines to which an adult was exposed in the past 6 months and the number of e-cigarette advertisements on TV to which an adult was exposed in the past 6 months. Outcomes were awareness of e-cigarettes, ever e-cigarette use, current e-cigarette use, current cigarette use and number of cigarettes smoked per month. FINDINGS: Exposure to one additional e-cigarette advertisement on TV was associated with a 0.18, 0.13 and 0.03 percentage point increase, respectively, in awareness, ever use and current use of e-cigarettes among all adults (P < 0.05). This exposure also was associated with a 0.11 percentage point increase in current cigarette use among all adults and an increase in cigarette consumption of 2.24 cigarettes per month among adults aged ≥ 45 (P < 0.05). CONCLUSIONS: Exposure to e-cigarette advertising appears to be positively associated with the use of e-cigarettes and cigarettes among adults of all ages, and with increased cigarette consumption among older adults.

E-Cigarettes and Adult Smoking: Evidence from Minnesota.

E-cigarettes provide nicotine in a vapor form, which is considered less harmful than the smoke from combustible cigarettes because it does not contain the toxins that are found in tobacco smoke. E-cigarettes may be effective in helping smokers to quit or they might simply provide smokers a method of bypassing smoking restrictions. There is very little causal evidence to date on how e-cigarette use impacts smoking cessation among adults. Minnesota was the first to impose a tax on e-cigarettes. This tax provides a plausibly exogenous deterrent to e-cigarette use. We utilize data from the Current Population Survey Tobacco Use Supplements from 1992 to 2015 to assess how the Minnesota tax increase impacted smoking cessation among adult smokers. Estimates suggest that the e-cigarette tax increased adult smoking and reduced smoking cessation in Minnesota, relative to the control group, and imply a cross elasticity of current smoking participation with respect to e-cigarette prices of 0.13. Our results suggest that in the sample period about 32,400 additional adult smokers would have quit smoking in Minnesota in the absence of the tax. If this tax were imposed on a national level about 1.8 million smokers would be deterred from quitting in a ten year period. The taxation of e-cigarettes at the same rate as cigarettes could deter more than 2.75 million smokers nationally from quitting in the same period. The public health benefits of not taxing e-cigarettes, however, must be weighed against effects of this decision on efforts to reduce vaping by youth.

Evaluating Econometric Studies of Alcohol Advertising.

OBJECTIVE: This article provides a guide for the behavioral scientist to understand and judge econometric studies of alcohol advertising. METHOD: The requirements for causal evidence in an econometric study include an empirical scenario in which alcohol advertising is not affected by alcohol consumption and in which both consumption and advertising are not affected by a common third variable. The articles included in this review were a sampling of older studies to illustrate the problems with these studies and newer studies, not covered by existing reviews, which try to directly address causality. RESULTS: The results from many prior studies are suspect by current econometric standards. However, a few newer econometric studies address causality and find a small positive effect of alcohol advertising on consumption. CONCLUSIONS: Many prior studies and some newer studies of alcohol advertising in the econometric literature have not addressed causality, and the results from these studies should be considered as descriptive only.

Does e-cigarette advertising encourage adult smokers to quit?

We provide the first causal evidence on whether e-cigarette advertising on television and in magazines encourages adult smokers to quit. We find the answer to be yes for TV advertising but no for magazine advertising. Our results indicate that a policy banning TV advertising of e-cigs would have reduced the number of smokers who quit in the recent past by approximately 3%. If the FDA were not considering regulations and mandates, e-cig ads might have reached the number of nicotine replacement therapy TV ads during that period. That would have increased the number of smokers who quit by around 10%.

Mandatory Access Prescription Drug Monitoring Programs and Prescription Drug Abuse.

Despite the significant cost of prescription (Rx) drug abuse and calls from policymakers for effective interventions, there is limited research on the effects of policies intended to limit such abuse. This study estimates the effects of prescription drug monitoring (PDMP) programs, which constitute a key policy targeting access to non-medical use of Rx drugs. Based on objective indicators of abuse as measured by substance abuse treatment admissions and mortality related to Rx drugs, estimates do not suggest any substantial effects of instituting an operational PDMP. We find, however, that mandatory-access provisions, which raised PDMP utilization rates by actually requiring providers to query the PDMP prior to prescribing a controlled drug, are significantly associated with a reduction in Rx drug abuse. The effects are driven primarily by a reduction in opioid abuse, generally strongest among young adults (ages 18 to 24), and underscore important dynamics in the policy response. Robustness checks are consistent with a causal interpretation of these effects. We also assess potential spillovers of mandatory PDMPs on the use of other illicit drugs and find a complementary reduction in admissions related to cocaine and marijuana abuse.

A Behavioral Economic Model of Alcohol Advertising and Price.

This paper presents a new empirical study of the effects of televised alcohol advertising and alcohol price on alcohol consumption. A novel feature of this study is that the empirical work is guided by insights from behavioral economic theory. Unlike the theory used in most prior studies, this theory predicts that restriction on alcohol advertising on TV would be more effective in reducing consumption for individuals with high consumption levels but less effective for individuals with low consumption levels. The estimation work employs data from the National Longitudinal Survey of Youth, and the empirical model is estimated with quantile regressions. The results show that advertising has a small positive effect on consumption and that this effect is relatively larger at high consumption levels. The continuing importance of alcohol taxes is also supported. Education is employed as a proxy for self-regulation, and the results are consistent with this assumption. The key conclusion is that restrictions on alcohol advertising on TV would have a small negative effect on drinking, and this effect would be larger for heavy drinkers. Copyright © 2015 John Wiley & Sons, Ltd.

Demand for smokeless tobacco: role of advertising.

While the prevalence of smokeless tobacco (ST) is low relative to smoking, the distribution of ST use is highly skewed with consumption concentrated among certain segments of the population (rural residents, males, whites, low-educated individuals). Furthermore, there is suggestive evidence that use has trended upwards recently for groups that have traditionally been at low risk of using ST, and thus started to diffuse across demographics. This study provides the first estimates, at the national level, of the effects of magazine advertising on ST use. The focus on magazine advertising is significant given that ST manufacturers have been banned from using other conventional media since the 1986 Comprehensive ST Act and the 1998 ST Master Settlement Agreement. This study is based on the 2003-2009 waves of the National Consumer Survey (NCS), a unique data source that contains extensive information on the reading habits of individuals, matched with magazine-specific advertising information over the sample period. This allows detailed and salient measures of advertising exposure at the individual level and addresses potential bias due to endogeneity and selective targeting. We find consistent and robust evidence that exposure to ST ads in magazines raises ST use, especially among males, with an estimated elasticity of 0.06. There is suggestive evidence that both ST taxes and cigarette taxes reduce ST use, indicating contemporaneous complementarity between these tobacco products. Sub-analyses point to some differences in the advertising and tax response across segments of the population. The effects from this study inform the debate on the cost and benefits of ST use and its potential to be a tool in overall tobacco harm reduction.

Racial, Ethnic, and Gender Differences in Physical Activity.

This study examines racial, ethnic and gender (REG) differentials in physical activity (PA), a significant input into health production and human capital investments. Prior studies have relied on leisure-time activity, which comprises less than 10% of non-work PA and does not capture specific information on intensity or duration, thus presenting an incomplete and potentially-biased picture of how various modes of PA differ across REG groups. This study addresses these limitations by constructing detailed and all-inclusive PA measures from the American Time Use Surveys, which capture the duration of each activity combined with its intensity based on the Metabolic Equivalent of Task. Estimates suggest significant REG differentials in work-related and various modes of non-work PA, with 30-65% of these differentials attributed to differences in education, socioeconomic status, time constraints, and locational attributes. These conditional PA differentials are consistent with and may play a role in observed REG disparities in health outcomes.

Alcohol demand and risk preference.

Both economists and psychologists have studied the concept of risk preference. Economists categorize individuals as more or less risk-tolerant based on the marginal utility of income. Psychologists categorize individuals' propensity towards risk based on harm avoidance, novelty seeking and reward dependence traits. The two concepts of risk are related, although the instruments used for empirical measurement are quite different. Psychologists have found risk preference to be an important determinant of alcohol consumption; however economists have not included risk preference in studies of alcohol demand. This is the first study to examine the effect of risk preference on alcohol consumption in the context of a demand function. The specifications employ multiple waves from the Panel Study of Income Dynamics (PSID) and the Health and Retirement Study (HRS), which permit the estimation of age-specific models based on nationally representative samples. Both of these data sets include a unique and consistent survey instrument designed to directly measure risk preference in accordance with the economist's definition. This study estimates the direct impact of risk preference on alcohol demand and also explores how risk preference affects the price elasticity of demand. The empirical results indicate that risk preference has a significant negative effect on alcohol consumption, with the prevalence and consumption among risk-tolerant individuals being 6-8% higher. Furthermore, the tax elasticity is similar across both risk-averse and risk-tolerant individuals. This suggests that tax policies are as equally effective in deterring alcohol consumption among those who have a higher versus a lower propensity for alcohol use.

State anti-tobacco advertising and smoking outcomes by gender and race/ethnicity.

OBJECTIVE: This paper examines overall and gender- and racial/ethnic-specific relationships between exposure to state-sponsored anti-tobacco televised advertising and smoking-related outcomes among US middle and high school students using five years of cross-sectional nationally representative data. DESIGN: Nationally representative 8th, 10th, and 12th grade student sample data for 1999-2003 were merged with commercial ratings data on mean potential audience exposure to network and cable television anti-tobacco advertising across the 74 largest US designated market areas, resulting in a final sample size for analysis of 122,340. Associations between state-sponsored anti-tobacco televised advertising exposure and youth smoking-related beliefs and behaviours were modelled while controlling for relevant individual and environmental factors as well as other televised tobacco-related advertising. RESULTS: Higher potential for exposure to state anti-tobacco advertising within the previous four months was generally associated with decreasing odds of current smoking across groups. In addition, such exposure was related, to varying degrees, with decreased perceptions that most/all friends smoked, stronger five-year intentions not to smoke, and increased perceived harm of smoking. These relationships appeared possibly to be weaker for Asian students. CONCLUSIONS: The results from these analyses indicate that state anti-tobacco advertising significantly relates to beneficial outcomes -- especially regarding current smoking behaviour -- among US youth as a whole.

Effect of televised, tobacco company-funded smoking prevention advertising on youth smoking-related beliefs, intentions, and behavior.

OBJECTIVE: To relate exposure to televised youth smoking prevention advertising to youths' smoking beliefs, intentions, and behaviors. METHODS: We obtained commercial television ratings data from 75 US media markets to determine the average youth exposure to tobacco company youth-targeted and parent-targeted smoking prevention advertising. We merged these data with nationally representative school-based survey data (n = 103,172) gathered from 1999 to 2002. Multivariate regression models controlled for individual, geographic, and tobacco policy factors, and other televised antitobacco advertising. RESULTS: There was little relation between exposure to tobacco company-sponsored, youth-targeted advertising and youth smoking outcomes. Among youths in grades 10 and 12, during the 4 months leading up to survey administration, each additional viewing of a tobacco company parent-targeted advertisement was, on average, associated with lower perceived harm of smoking (odds ratio [OR]=0.93; confidence interval [CI]=0.88, 0.98), stronger approval of smoking (OR=1.11; CI=1.03,1.20), stronger intentions to smoke in the future (OR=1.12; CI=1.04,1.21), and greater likelihood of having smoked in the past 30 days (OR=1.12; CI=1.04,1.19). CONCLUSIONS: Exposure to tobacco company youth-targeted smoking prevention advertising generally had no beneficial outcomes for youths. Exposure to tobacco company parent-targeted advertising may have harmful effects on youth, especially among youths in grades 10 and 12.

Alcohol advertising and alcohol consumption by adolescents.

This study investigates the effects of alcohol advertising on adolescent alcohol consumption. The theory of an industry response function and evidence from prior studies indicate the importance of maximizing the variance in advertising measures. Monitoring the Future (MTF) and National Longitudinal Survey of Youth 1997 (NLSY97) data are augmented with alcohol advertising, originating on the market level, for five media. The large sample of the MTF allows estimation of race and gender-specific models. The longitudinal nature of the NLSY97 allows controls for unobserved heterogeneity with state-level and individual fixed effects. Price and advertising effects are generally larger for females relative to males. Controls for individual heterogeneity yield larger advertising effects, implying that the MTF results may understate the effects of alcohol advertising. Results from the NLSY97 suggest that a 28% reduction in alcohol advertising would reduce adolescent monthly alcohol participation from 25% to between 24 and 21%. For binge participation, the reduction would be from 12% to between 11 and 8%. The past month price-participation elasticity is estimated at -0.26, consistent with prior studies. The results show that reduction of alcohol advertising can produce a modest decline in adolescent alcohol consumption, though effects may vary by race and gender.

Mixed messages on tobacco: comparative exposure to public health, tobacco company- and pharmaceutical company-sponsored tobacco-related television campaigns in the United States, 1999-2003.

AIMS: To describe and compare the extent of exposure among youth and adults to antitobacco advertising funded by tobacco control agencies, and to smoking-related advertising from tobacco and pharmaceutical companies. DESIGN: Archival records of television advertising exposures from Nielsen Media Research for the largest 75 media markets in the United States from 1999 to 2003. MEASUREMENTS: Mean monthly advertising exposures for households with televisions and adolescents aged 12-17 years for: state tobacco control programs; the national American Legacy Foundation (Legacy) program; tobacco company advertising for youth smoking prevention, parent advertising and corporate image; pharmaceutical company advertising for nicotine replacement therapy and Zyban; and other miscellaneous tobacco-related advertising. FINDINGS: Combined tobacco company youth/parent advertising exposures matched those for combined State/Legacy campaigns (4.56 advertisements/month versus 4.97 advertisements/month among households; 3.05 advertisements/month versus 3.38 advertisements/month among adolescents). Tobacco company corporate image advertising averaged 3.25 advertisements/month among households and 0.73 advertisements/month among adolescents. Tobacco company advertising exceeded public health-sponsored advertising by a factor of 1.57-1, and among youth by 1.11-1. Pharmaceutical companies were the largest sponsor of tobacco-related advertising for households (10.37 advertisements/month) and provided significant exposure among adolescents (2.61 advertisements/month). CONCLUSIONS: This is the first study to demonstrate systematically that public health-sponsored antitobacco campaigns in the United States are matched or exceeded by tobacco company advertising, as well as pharmaceutical cessation product advertising. Research is needed to determine whether such advertising may dilute or undermine the established benefits of tobacco control-sponsored campaigns.

Televised state-sponsored antitobacco advertising and youth smoking beliefs and behavior in the United States, 1999-2000.

BACKGROUND: Recent state budget crises have dramatically reduced funding for state-sponsored antitobacco media campaigns. If campaigns are associated with reduced smoking, such cuts could result in long-term increases in state health care costs. METHODS: Commercial ratings data on mean audience exposure to antitobacco advertising that appeared on network and cable television across the largest 75 media markets in the United States for 1999 through 2000 were combined with nationally representative survey data from school-based samples of youth in the contiguous 48 states. Multivariate regression models were used to analyze associations between mean exposure to state antitobacco advertising and youth smoking-related beliefs and behaviors, controlling for individual and environmental factors usually associated with youth smoking and other televised tobacco-related advertising. RESULTS: Mean exposure to at least 1 state-sponsored antitobacco advertisement in the past 4 months was associated with lower perceived rates of friends' smoking (odds ratio [OR], 0.72; 95% confidence interval [CI], 0.58-0.88), greater perceived harm of smoking (OR, 1.25; 95% CI, 1.11-1.42), stronger intentions not to smoke in the future (OR, 1.43; 95% CI, 1.17-1.74), and lower odds of being a smoker (OR, 0.74; 95% CI, 0.63-0.88). CONCLUSIONS: To our knowledge, this study is the first to explore the potential impact of state-sponsored antitobacco media campaigns while controlling for other tobacco-related advertising and other tobacco control policies. State-sponsored antitobacco advertising is associated with desired outcomes of greater antitobacco sentiment and reduced smoking among youth. Recent cuts in these campaigns may have future negative health and budgetary consequences.

The effect of alcohol consumption on the earnings of older workers.

This study analyses the effects of alcohol consumption on the labour market outcomes of older individuals. The data set used consists of five waves of the Health and Retirement Study. The results from models with a limited number of covariates indicate that there is a wage and earnings premium associated with alcohol use. This premium progressively diminishes as more individual-level controls are added to the standard earnings function. The data set is longitudinal which allows for estimation of individual-fixed-effects specifications. These results indicate that alcohol use does not have a positive effect on earnings and wages.

An economic analysis of adult obesity: results from the Behavioral Risk Factor Surveillance System.

This paper examines the factors that may be responsible for the 50% increase in the number of obese adults in the US since the late 1970s. We employ the 1984-1999 Behavioral Risk Factor Surveillance System, augmented with state level measures pertaining to the per capita number of fast-food and full-service restaurants, the prices of a meal in each type of restaurant, food consumed at home, cigarettes, and alcohol, and clean indoor air laws. Our main results are that these variables have the expected effects on obesity and explain a substantial amount of its trend.

The effects of price on alcohol consumption and alcohol-related problems.

The most fundamental law of economics links the price of a product to the demand for that product. Accordingly, increases in the monetary price of alcohol (i.e., through tax increases) would be expected to lower alcohol consumption and its adverse consequences. Studies investigating such a relationship found that alcohol prices were one factor influencing alcohol consumption among youth and young adults. Other studies determined that increases in the total price of alcohol can reduce drinking and driving and its consequences among all age groups; lower the frequency of diseases, injuries, and deaths related to alcohol use and abuse; and reduce alcohol-related violence and other crime.

Alcohol advertising and youth.

OBJECTIVE: The question addressed in this review is whether aggregate alcohol advertising increases alcohol consumption among college students. Both the level of alcohol-related problems on college campuses and the level of alcohol advertising are high. Some researchers have concluded that the cultural myths and symbols used in alcohol advertisements have powerful meanings for college students and affect intentions to drink. There is, however, very little empirical evidence that alcohol advertising has any effect on actual alcohol consumption. METHOD: The methods used in this review include a theoretical framework for evaluating the effects of advertising. This theory suggests that the marginal effect of advertising diminishes at high levels of advertising. Many prior empirical studies measured the effect of advertising at high levels of advertising and found no effect. Those studies that measure advertising at lower, more disaggregated levels have found an effect on consumption. RESULTS: The results of this review suggest that advertising does increase consumption. However, advertising cannot be reduced with limited bans, which are likely to result in substitution to other available media. Comprehensive bans on all forms of advertising and promotion can eliminate options for substitution and be potentially more effective in reducing consumption. In addition, there is an increasing body of literature that suggests that alcohol counteradvertising is effective in reducing the alcohol consumption of teenagers and young adults. CONCLUSIONS: These findings indicate that increased counteradvertising, rather than new advertising bans, appears to be the better choice for public policy. It is doubtful that the comprehensive advertising bans required to reduce advertising would ever receive much public support. New limited bans on alcohol advertising might also result in less alcohol counteradvertising. An important topic for future research is to identify the counteradvertising themes that are most effective with youth.