Econometric Analysis of Advertisers’ Role in Smoking Cessation Treatment

Presenter: Hua Wang, Cornell University

Abstract

Rational: Smoking cessation prevents smoking-related diseases. The smoking cessation product industry has spent between $100 to $200 million annually in recent years in advertising numerous effective smoking cessation pharmaco-therapies. Avery et al. (JPE 2007) finds that smokers exposed to more magazine product advertisements are more likely to attempt to quit and quit successfully. Because of the broad reach of television, television advertising of cessation products may reach more smokers with lower socio-economic status (SES), who usually have lower demand for smoking cessation.

Objectives: We test the hypothesis that TV advertising of cessation products may reduce disparities in demand for smoking cessation between smokers with lower and higher SES. We also explore synergies between public and private sectors by testing whether profit-maximizing manufacturers might advertise cessation products more heavily in response to more strict public tobacco control policies.

Methodology: We use data from the Simmons National Consumer Survey (NCS) 1997-2004. The NCS provide detailed information on respondents’ television-watching habits. Using this information we create measures of respondents’ potential exposure to TV advertisements by merging data from TNS Media Intelligence on television advertisements for smoking cessation products. The analysis sample consists of 129,558 adults, of which 26,804 are current or former smokers. We estimate time fixed effects models of smoking cessation behavior. Advertising exposure is measured as number of TV advertisements watched in the past year. We define respondents in lower SES if they are non-white, with high school education or below, and in bottom quintile of income. To test whether advertisers would advertise more in response to public tobacco control policies, we estimate a model of advertising exposure with similar control variables as the model above and two additional variables for cigarette tax and price as indicators for public tobacco control policies.

Results: Preliminary results show that exposure to every 100 more TV advertisements for smoking cessation products increases the likelihood of having a quit attempt, using any cessation product, and having a successful quit by 1.0, 0.3, and 0.2 percentage points, respectively. These effects are similar among lower- and higher-SES smokers. Respondents see 14.9 more TV cessation products advertisements with $1 increase in cigarette price; and they see 17.8 more advertisements if the cigarette tax is raised by $1.

Conclusions: Our findings suggest TV advertising of smoking cessation products may help prevent diseases attributable to smoking, especially for smokers in lower SES. Private sectors’ response of heavier advertising may magnify the impact of public tobacco control policies.