The Economics of Smokeless Tobacco

Saffer, Henry

Abstract

Smokeless tobacco (ST) has been determined to be hazardous to health. However, there have been no studies which have examined the impact of ST advertising on ST use and there is very little prior research on the targeting of ST advertising. Research on the effects of ST prices or taxes on ST use and on cross- effects with other nicotine products has also been very limited. Furthermore, no prior studies have investigated the impact of policies and economic factors relating to ST, cigarettes and nicotine replacement therapy (NRT) in a single framework. This project will provide the first estimates, by demographic group, of the effect of ST advertising and cross-effects with other nicotine products on ST use. Since smokers may be using ST to attempt smoking cessation, and new marketing strategies are highlighting ST as an alternative in situations that do not permit smoking, the inter-relationships between these nicotine products are becoming increasingly important. As smoking bans are imposed across the nation and cigarette sales continue to decline, new ST products are being marketed to smokers for use in situations where they are unable to smoke. These new ST products appear to be designed to appeal to new demographic segments beyond the traditional market. This project will analyze magazine advertising to determine trends in the targeting of ST advertising across population segments. Changes in targeting represent changes in the marketing strategy and are predictive of future changes in use. This project will provide the most comprehensive picture to date of ST targeting and the effects of ST advertising, price and policy on ST use, while considering the inter-relationship between ST, cigarettes, and NRT. Understanding the demographic targeting of advertising and quantifying the direct effects and cross-effects of price, advertising, taxes, and other policy factors on ST use will be important in designing effective policy responses to reduce the use of ST.

Public Health Relevance

The decline in smoking has created a new opportunity to market smokeless tobacco (ST) products. This project will provide the most comprehensive picture to date of demographic targeting of ST and the effects of ST advertising, price and policy on ST use. This research will be important in designing effective policy responses to reduce the use of ST.