The effects of advertising restrictions on cigarette prices: evidence from OECD countries

Abstract

This paper investigates the effects of cigarette advertising restrictions on the price of cigarettes in OECD countries. Using data from 1964 through 1990, we find that outright proscription of advertising does not influence the price of cigarettes. On the other hand, restrictions placed on advertising actually reduce the price of cigarettes. The results reinforce those of Stewart (International Journal of Advertising, 12, 1993) and suggest that public policy directed at cigarette advertising may not be a good vehicle to dissuade cigarette consumption.