Simultaneous Model Of Cigarette Analysis

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To this day, the tobacco industry is a multi billion-dollar industry that brings in income based off the addiction and poor health of society. This industry, brining in so much money for itself, costs billons of dollars on society. In a paper by the “Coalition Québécoise pour le Contrôle du Tabac”, the economic costs of cigarettes on Canadian society were analyzed. It was found that in 1999, the total cost of tobacco and cigarette use on Canadian health care can be estimated to be $2,644,480,000; this health care cost includes, but is not limited to, cigarette related hospitalizations, medical care and medication (“Tobacco: Economic Considerations” 1). The Coalition found that tying in with this cost, and costs due to “indirect productivity …show more content…

It can be questioned if cigarette advertising actually does have an impact on demand for cigarettes. A study titled “A Simultaneous Model of Cigarette Advertising: Effects on Demand and Industry Response to Public Policy”, by Barry J. Seldon and Khosrow Doroodian, a mathematical model was used, and it was found that “the estimated demand coefficients [they had found] suggest that advertising increases cigarette consumption and health warning reduce aggregate demand for cigarettes” (Seldon & Doroodian 675). This not only demonstrates how the graphic warning are effective as stated previous, but also that the advertising that is out in the general public’s will have an impact on the economic demand of cigarettes. Because of the major advertising bans, and the evidence found in this study, it can be concluded that demand for cigarettes is thus reduced with a reduction in advertisements. Although tobacco companies are spending more in today’s society on advertisements (Qi 246), they are less prevalent and less found in the general public because of strict regulations that have been put in place. Seldon and Doroodian state that their results “imply that the government could decrease demand by banning all forms of advertisement”, but they go on to stating that “such a ban would not eliminate smoking due to habit persistence and the “advertising” that occurs when individuals see …show more content…

Through out its long and devastating history, the cigarette and it’s advertising have had devastating sociological impacts and economic impacts. Tobacco companies attempted to appeal to various underprivileged or minority groups in society, have made money based off addiction and cancer, and have costed society loads of money. With the advertising bans and restrictions that came in both Canada in 1988 (Dunsmuir), and the United States in 1971 (Qi 215), the industry was heavily impacted, and smoking prevalence has since been at an all new low since it peaked. Cigarettes are once again being associated as something negative, just as they were when they first emerged (Gardner 13), and may one day be a thing of the

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