No More Youth

Advertising?
The Reaction of Tobacco Companies to the
Master Settlement Agreement
Michael Elliot Hofer
Policy Analysis and Management Honors Thesis

I would like to thank Dean Alan Mathios, Professor Donald Kenkel and Professor Sharon Sassler
for their help and guidance through this process. I would also like to acknowledge Professor
Rosemary Avery and her research assistants for the data that I used for this study, which came
from the SCADs database which was created through their hard work and dedication.

Table of Contents
1. Introduction.......................................................................................................................................
2. Tobacco regulatory policy and its evolution in the United States......................................................
2.1 Types of tobacco regulatory policy.............................................................................................
2.2 Tobacco in the United States before the Master Settlement Agreement......................................
2.3 The Master Settlement Agreement and recent policy initiatives...............................................
3. Literature Review............................................................................................................................
3.1 Price increases and smoking rates.............................................................................................
3.2 Youth smoking and susceptibility to advertisements.................................................................
3.3 Youth smoking and brand recognition.......................................................................................
3.4 Aftermath of the MSA...............................................................................................................
4. Hypotheses......................................................................................................................................
5. Data and Methods............................................................................................................................
5.1 Data...........................................................................................................................................
5.2 Econometric Model and Identification......................................................................................
6. Results.............................................................................................................................................
6.1 Descriptive Statistics.................................................................................................................
6.2 The effect of the MSA on tobacco advertisements in all magazines.........................................
6.3 The different reactions to the MSA by RJR and Philip Morris in all magazines.......................
6.4 The effect of the MSA on tobacco advertisements in youth exposure magazines.....................
6.5 The different reactions to the MSA by RJR and Philip Morris in youth exposure
magazines........................................................................................................................................
7. Discussion and Conclusions............................................................................................................

1. Introduction
In 2009, over 20% of high schools seniors had smoked a cigarette in the last 30
days (Johnston et al., 2009). This is particularly troublesome since an estimated 438,000
Americans die each year as a result of smoking (CDC, 2009b). Even more suffer from
smoking-related illnesses, including cardiac attacks, lung cancer, and other respiratory
and cardiovascular diseases (CDC, 2008). As tobacco use increases, the likelihood of
contracting any of the above illnesses increases as well.
In the latter half of the 20th century, the US government began to regulate youth
smoking through restrictions on advertising. One reason for this is the contention that
cigarette advertisements are the most important factor in determining cigarette
consumption (Nelson, 2006). In 1991, a study found that children between the ages of 5
and 6 found Joe Camel (the cartoon character used to market Camel cigarettes) more
recognizable than Mickey Mouse (Olstad, 2009). The results of the aforementioned and
other studies led the government to attempt to eliminate, or at the very least cripple,
cigarette advertisements targeted at children. This policy was promoted through the 1998
Master Settlement Agreement (MSA), a deal stuck between the state attorneys general
and the predominant cigarette manufacturers, that led to a tax-like increase in cigarette
prices, as well as advertising and promotion restrictions (Nelson, 2006). Among the
regulations was the elimination of cartoon characters, such as Joe Camel, and other
advertising figures, such as the Marlboro Man, from advertisements. These icons were
seen as marketing tactics aimed at children. Additionally, outdoor advertising, such as
billboards were banned regardless of their placement (Office of the Attorney General of

California, 2009). These restrictions were imposed so that children would be less exposed
to cigarette advertisements.
The above limitations have had major ramifications on not only the cigarette
advertising market but on the overall tobacco market. This paper examines these changes
by determining the impact the MSA had on cigarette advertising in magazines. More
specifically, it looks at how the major companies, such as RJ Reynolds and Philip
Morris, responded to the agreement. Particularly of interest is the tobacco advertising in
magazines with high youth exposure.
2. Tobacco regulatory policy and its evolution in the United States
2.1 Types of tobacco regulatory policy
The two fundamental types of tobacco regulations are demand-side and supplyside policies. The former are restrictions that alter the demand curve while the latter
affect the supply curve. Demand-side policies are aimed at changing consumer behavior.
Conversely, supply-side policies are aimed at changing producer behavior. Although
these categories are generally useful, basic economics suggests that they can also be
ambiguous. For example, whether it aims to change consumer or producer behavior,
when a new regulation causes the market to reach a new equilibrium both consumers and
producers behaviors have changed. .
There are three principal categories of demand-side regulation: those that restrict
where you can smoke, taxes, and minimum age restrictions. The first category of
demand-side tobacco control policy is where one is physically allowed to smoke.
Countries have adopted laws regarding this category at different levels of government.

For instance, the Canadian government restricts smoking in non-public workplaces

(examples of public workplaces are restaurants and stores) by mandating that an
employer can designate a smoking area but that it has to be at most 25% of the floor
space of the business. Canada leaves further restrictions, such as banning smoking in
restaurants and bars, to municipalities, many of which have enacted such laws. Similarly,
the United States federal government banned smoking in federally funded schools and
health facilities but individual states and counties enacted more stringent restrictions
(Shafey et al., 2003). As of October 2009, 19 states had 100% smoke-free workplaces,
restaurants, and bars (Americans for Nonsmokers Rights, 2009). France and the United
Kingdom have similar regulations but they were enacted at the federal level (British
Broadcasting Corporation, 2009).
The second category of demand-side regulation is taxes. The countries within the
European Union, as well as Canada and the United States have fairly substantial taxes on
cigarettes. Canadas taxation is largely dependent on the province one is in. The average
tax rate is $30 per carton of 200 cigarettes. Saskatchewan has the highest tax at $35 and
Yukon the lowest at $20.40 (CBC News, 2005). The United States taxes less than Canada
does but still has an average tax of $2.21 per pack and has increased their federal excise
tax from 24 cents in 1995 to $1.01 in 2009. These are tax averages since the United
States, like Canada, leaves additional taxation up to the individual states and counties
(CDC, 2009a). However, compared to France and the United Kingdom, the United States
and Canada have low tax rates. Frances average tax burden is 3.71 (approximately
$5.26) per 20 cigarettes and the United Kingdoms average tax burden is 4.33
(approximately $6.76) per 20 cigarettes (Tobacco Manufacturers Association, 2008).

After factoring in the exchange rate, the taxes in these countries are markedly higher than
those of Canada and the United States.
The third category of demand-side regulation is a minimum purchasing age. Most
countries have a minimum age at which people can purchase items such as alcohol and
tobacco. By preventing some people from buying the items, they are directly altering
demand. Since fewer people can readily obtain it, there is a reduction in demand. If there
were no minimum purchasing age than it is possible that overall demand would increase
as a result of more people being able to procure cigarettes. The United States, Canada and
the United Kingdom both require that a person be 18 years of age to purchase tobacco,
but France allows 16 year olds to purchase tobacco products (Shafey et al., 2003; British
Broadcasting Corporation, 2007).
Supply-side regulations are primarily aimed at restricting the supply of cigarettes.
The two principal categories are packaging restrictions and regulations limiting the
placement and content of advertisements. This is one area where countries tend to have
fairly different regulations. The United Kingdom, United States, France and Canada,
among many other countries, require warning labels on all cigarettes packages sold. The
United States requires that the warnings be in a color that contrasts the packages color, in
10 point font, at least 2 lines long and say one of five different Surgeon Generals
warnings. The United Kingdom only has two possible warnings for the front of packages
(for example, smoking seriously harms you and others around you) and fourteen
different ones for the back of the package (for example, smoking causes fatal lung
cancer). The UK also mandates that the warnings must cover 30% of the front of the
package and 40% of the back and be in a color that contrasts with the package. France

has rotating labels as well but they only need to cover a minimum of 4% of the package.
However, these warnings must be in a place such that when the package is opened
correctly, the warning label is not destroyed (Shafey et al., 2003). Canada, however, has
the strictest regulations. Their warnings are 5 paragraphs in length and must be on the
package in French and English and occupy at least 50% of the main outside surface of the
packaging. Additionally, they must list the toxic ingredients of the cigarettes and their
proportion of the total weight of the product. These warnings also sometimes contain a
graphic image of the damage done to internal organs as a result of smoking (British
Broadcasting Corporation, 2009). Thus, each country has their own set of regulations on
the packaging of cigarettes. A summary of the above regulations can be found in Table 1
in the Appendix.
The second category of supply-side regulation is the placement and content of
advertisements. All of these countries forbid the use of advertising outdoors through
billboards or other means by which children could be exposed to them. Similarly, none of
them allow tobacco advertisements on television and only the United Kingdom allows
advertisements on the radio (although they are heavily restricted). France has taken this a
step further and mandated that these advertisements cannot appear in magazines or
newspapers either. The only type of advertisements that the French government allows
are small posters (60cm x 80cm) at the point of sale; however, they cannot be visible
from outside the store. The United Kingdom also does not allow advertisements in
magazines or newspapers. Canada is a little less restrictive in that it allows
advertisements in magazines, but only those with primarily adult readership. The United
States is perhaps the least restraining in that it allows advertisements in magazines but

mandates that the advertisements contain a Surgeon Generals warning (similar to those
that appear on the cigarette packaging). Therefore, limitations on the locations and
content of advertisements are very different depending on the country (Shafey et al.,
2003).
Despite different regulatory standards, these countries do not have radically
different smoking rates. Among adults, France and the United Kingdom were tied with
the highest rate at 27%, followed by the United States at 23.3% and Canada had the
lowest with at 21.7%. These rankings are fairly different when considering youth and
there is also more dispersion. In this category, the United Kingdom has the highest rate
with 26%, followed by, France (24%), the US (23.1%), and Canada (18.4%). However,
not all of these countries have the same definition of youth so comparing them is
entirely effective. Nevertheless, some conclusions can be drawn. An interesting similarly
between these rankings is that Canada, the country with the strictest regulations has the
lowest smoking rate in both populations (Shafey et al., 2003; Office of National
Statistics, 2009). It is unknown whether these regulations are the reason for the lower
rates or if there are other factors. Nevertheless, these countries do not have radically
different smoking rates despite large variations in policy amongst them.

2.2 Tobacco in the United States before the Master Settlement Agreement
The first tobacco advertisement was run in a local New York newspaper by the
Lorillard Tobacco Company in 1789. At that time, manufacturing cigarettes was very
labor intensive and transportation was exceedingly difficult. It was not until almost a
century later that the industry truly began. In the 1880s, the first cigarette machine was
7

created and allowed 100 times as many cigarettes to be made each day, compared to,
before the machines inception, when cigarettes were made by hand (Borio, 2001).
Afterwards, color lithography was invented and truly gave birth to cigarette advertising.
The lithograph also allowed for the creation of brand names which, in turn, boosted sales.
The tobacco companies created trading cards featuring movie stars, athletes and other
famous people, that were inserted each pack. This helped to strengthen brands by making
their names more present in popular culture. By connecting their brands to popular
figures, such as Joe DiMaggio, companies created more of a name for themselves and
widened their appeal. Approximately seventy years later, the companies also provided
free cigarettes to soldiers during World War II. The result was a mass-return of cigaretteaddicted GIs at the end of the war (Olstad, 2009).
The 1950s began as a very profitable time for tobacco companies. Not only did
they have all of the aforementioned new customers, but their advertising rose to new
heights. They were able to use doctors, dentists and celebrities (such as Mickey Mantle)
in their advertisements. Even studies beginning to uncover the link between smoking and
lung cancer could not ruin the decade. The response to the revelations was the inclusion
of filters in cigarettes, even though it was eventually determined that the filters were
ineffective (Olstad, 2009). However, the late 1950s brought a new challenge for tobacco
companies: cancer. In 1956, Surgeon General Leroy Burney commissioned a study group
to assess the scientific data relating to tobacco and health. The group uncovered sixteen
studies, in five countries, that found a significant association between smoking and lung
cancer. Using this empirical basis, as well as the growing sentiment in the popular press
that smoking was tied to lung cancer, the group was led to conclude that the sum total of

scientific evidence establishes beyond reasonable doubt that cigarette smoking is a

causative factor in the rapidly increasing incidence of human epidermoid carcinoma of
the lung. In 1964, Surgeon General Luther Terry released another report, this one based
on over 7,000 studies that linked smoking with lung cancer and other diseases. The
cigarette companies reacted by neither confirming nor denying the Surgeon Generals
findings. The manufacturers insisted that more research was needed and that the Surgeon
General had not proven that cigarettes caused cancer. Some hypothesized that the
industry would collapse after these discoveries but that did not occur; between 1964 and
1973 tobacco consumption did not decline greatly (Brandt, 2007). Numerous econometric
studies have examined the effect of these information shocks on demand for tobacco
products. Sloane et al. (2002) and Hamilton (1972) performed such an analysis and found
that the information did decrease demand but not drastically. Warner (1989) determined
that anti-smoking campaigns did in fact have a measurable effect on tobacco use. For
example, in 1985 there were 56 million smokers and it was estimated that without the
anti-smoking campaigns there would have been over 90 million smokers.
The findings of the two Surgeon Generals were instrumental in the first tobacco
regulations in the United States. In 1964, the Federal Trade Commission decreed that
tobacco companies would be committing an unfair or deceptive act if their packages
and advertisements did not contain any information on the danger posed by smoking.
Thus, the first Surgeons General warning label was born and read Caution: cigarette
smoking may be hazardous to your health (Brandt, 2007). This regulation was imposed
by the Federal Cigarette Labeling and Advertising Act (Borio, 2001). In June 1967, the
Federal Trade Commission (FTC) found that the warning label was ineffective. This was

chalked up to the fact that the legislation had been heavily influenced by the tobacco
industry: when the bill was moving through Congress, the tobacco companies had exerted
influence through friends of theirs in Congress. The result was a watered down version of
the original legislation, which would have put, on all packages and advertisements, a
warning label that read Caution: cigarette smoking is dangerous to health and may cause
death from cancer and other diseases (Brandt, 2007). In 1969, Congress passed the
Public Health Cigarette Smoking Act of 1969, which mandated that beginning in 1971,
all packages would read Warning: the Surgeon General has determined that cigarette
smoking is dangerous to your health and, in 1984 Congress passed the Comprehensive
Smoking Prevention Education Act which created the rotational labels that are still being
used today (Borio, 2001).
In 1969, the FCC announced that they sought to ban all broadcast cigarette
advertising (Borio, 2001). That July, the president of Philip Morris, Joseph F Cullman,
announced that the tobacco industry would voluntarily cease all television advertising in
exchange for being spared from antitrust legislation. One reason the industry may have
been willing to compromise was the limited ramifications in other countries, such as
Great Britain, France, and Italy. Another potential explanation is that since all of the
major companies were advertising, a total cessation in advertising had the potential of
raising industry profits. This second explanation is dependent on the goal of cigarette
advertising. It is only conceivable if companies advertise in order to increase their own
market share, and not to bring more people into the general market. However, the
broadcast ban was not the end of cigarette regulation. In 1972, the FTC succeeded in
requiring a warning label on all tobacco advertisements (Brandt, 2007).

10

In the 1970s and 1980s, the Surgeon General and other researchers began to focus
on secondhand smoke. The 6th Surgeon Generals report (1972) addressed public
exposure to air pollution from tobacco smoke and its dangers. In 1975, Minnesota
became the first state to pass legislation that banned smoking in public offices, stores and
banks (Borio, 2001). Over the next few years, many states had difficulty passing similar
laws but individual corporations started to take action. By the mid 1980s, most largecorporations had explicit smoking policies and by 1990 smoking was banned on all
airplanes as well (Brandt, 2007). In 1993, the Environmental Protection Agency declared
secondhand smoke to be a Class A carcinogen (which means that there is no safe level of
exposure). Throughout the rest of the decade, Congress banned smoking in public schools
and other locations where federally funded childrens services are provided (Borio,
2001).
In 1994, the CEOs of the seven largest tobacco companies testified in front of
Congress. This is one of the most emblematic events of cigarette regulation. The CEOs
were still denying that tobacco was harmful or addictive. The CEO of Philip Morris
stated that smoking may cause lung cancer. When prompted about why he said "may,"
he replied that no empirical studies were conducted and without laboratory studies one
cannot be sure. The other CEOs agreed and said that they do not believe that smoking
causes cancer. They also restated their belief that nicotine is not addictive. All of the
above contentions were made under oath (U.S. Congress, 1994). The next big
development in the struggle between the government and the tobacco companies was the
Master Settle Agreement.

11

2.3 The Master Settlement Agreement and recent policy initiatives

The legal basis of the MSA was to recoup Medicaid costs. For years, individuals
had attempted to gain compensation from tobacco conglomerates for the health issues
that they had incurred as a result of cigarette use. For the most part, these suits were
unsuccessful. During the Clinton administration, anti-tobacco sentiment was rising and a
bill was drafted by Congress that would have heavily regulated both the tobacco industry
and where people could smoke (indoors, public spaces, etc.).This bill ultimately did not
pass. Amidst all this, in 1995 the state attorneys general filed law suits against the
tobacco companies in order to obtain money to offset the health care expenses smoking
caused. In order to avoid multiple simultaneous class-action law suits, the tobacco
companies and the state attorneys general settled on the MSA, which was signed on
November 23, 1998 (Redhead, 1999).
There are three principal parts of the Master Settlement Agreement. The first
concerns financial restitution. As previously mentioned, one of the reasons for the classaction law suits was states attempting to recoup a portion of the Medicaid expenses
caused by tobacco products. Rather than having a lump-sum settlement, a tax was
added to cigarettes. The income from this tax went (and still goes) to the states to
compensate for the costs incurred. Additionally, if new companies attempted to enter the
market, they were still required to pay the MSA-imposed levy so that there was no
competitive advantage (Redhead, 1999). If they had not been required to pay the states,
they could be able to charge lower prices and thus would have a distinct advantage in the
market compared to the companies that had to repay the medical costs. In an ideal world,
the income from the tax would be divided up amongst the states according to the state12

specific medical costs resulting from tobacco use. However, politics influenced the
distribution of the tax income and the above optimal situation did not occur. For instance,
California accounted for approximately 8.5% of the medical costs but receives almost
13% of the settlement income and Arizona receives 1.5% compared to the 0.53% of the
medical costs incurred. Conversely, Indiana accounted for 3.59% of the medical costs but
only receives 2.08% of the income. If the optimal situation had occurred these states
would be receiving a proportion equal to that of the expenditures they incurred (Viscusi
and Hersch, 2009).
Another key part of the Master Settlement Agreement was the release of tobacco
industry documents. The tobacco companies were required to release all of their internal
documents and post them on the internet (www.tobaccodocuments.org). The rationale
behind this disclosure was to decrease litigation costs for those seeking to sue the tobacco
companies. If the documents remained private, potential plaintiffs would have to spend
money subpoenaing the documents. With this release, there is little cost to document
discovery (Viscusi and Hersch, 2009).
The third important component of the Master Settlement Agreement was a set of
new regulations. The overarching goal of this section was to decrease youth exposure to
cigarette advertising. Among the limitations were the ban of targeting youths in
advertising and cigarette making, the use of cartoons (such as the penguin in Kool
advertisements and Joe Camel), the use of billboards, and paying for product placement
in movies and television. Additionally, restrictions were placed on the conglomerates
ability to sponsor events (Viscusi and Hersch, 2009). The MSA specifically states that
youth targeting is prohibited. The agreement defines this as taking any action directly,

13

or indirectly, to target Youth [those under the age of 18] within any Settled State in the
advertising, promotion or marketing of Tobacco Products, or take any action the primary
purpose of which is to initiate, maintain or increase the incidence of Youth smoking
within any Settling State (Office of the Attorney General of California, 2009). The
restriction that will be explored in this paper is the limiting of youth exposure to
advertising. This clearly bans advertising in magazines such as Seventeen and Teen
Cosmo that are targeted almost exclusively at youth audiences. However, the placement
of advertisements in magazines that do not have an exclusive youth audience, such as
Sports Illustrated, is not expressly banned.
The Master Settlement Agreement was not the end of regulations constricting the
cigarette industry. In June 2009, the United States Congress passed the Family Smoking
Prevention and Tobacco Control Act which transferred oversight of the cigarette industry
from the Bureau of Alcohol, Tobacco and Firearms to the Food and Drug Administration
(Wilson, 2009). The first official action taken by the FDA with its new power was to
forbid the sale of flavored cigarettes (menthol cigarettes were not considered flavored).
The FDA saw these products, such as the Camel Exotic Blends line of cigarettes, as
predominantly targeting youth and thus should not be allowed. The only company truly
affected by this was RJ Reynolds, the maker of the aforementioned line of Camel
cigarettes (Heavey, 2009). These changes will not be reflected in this papers analyses.
However, it is important to note that the regulation of the cigarette market did not cease
in November 1998.
3. Literature Review

14

3.1 Price increases and smoking rates

Many policy makers believe that higher prices reduce smoking, but the research
on the topic is less clear. Katzman et al. (2007) found that increases in the price of
tobacco, such as those resulting from taxes, decrease the probability of buying cigarettes
by 5.9% per $1 increase in price. However, they also found that price increases may not
stop people from smoking altogether. Those that continue to smoke get their cigarettes
from others, what the authors call a social market for cigarettes. Lewit et al. (1981) found
a similar result. They found that price increases are particularly effective in reducing the
amount teens smoke since young adults are much more responsive to prices. They
contend that a large tax could cause a large number youth who smoke to cease the
activity while still leaving industry sales figures minimally or completely unaffected.
Siapush et al. (2009) analyzed the responsiveness to cigarette price of over 500,000
people in Australia over a 15 year period (1991 to 2006). This study used stratified
random sampling based on electoral districts in the countrys 5 largest cities. The
researchers sought to determine the effect of tobacco price increases on the three main
income classes: low-income, middle-income, and high-income. They found that a $1
increase in price caused a 2.6% decrease in smoking among low-income people, a .3%
decrease in middle-income people, and a .2% decrease in high-income people. The lowincome results help strengthen the claim, made in Lewit et al. (1981), that young adults
are more responsive to price made in Lewit et al. (1981). Overall, the study suggests that
increased prices do lower the amount of tobacco products purchased. Carpenter and Cook
(2008) sought to expand on previous research on the effect of price by using a national
sample of the United States. The researchers used the Youth Risk and Behavior Surveys
15

(the national version), in addition to data from the state and local versions of this survey,
from 1991-2005. This study contained demographic data as well as data detailing the
prevalence and frequency of a plethora of behaviors. In this case smoking is the relevant
behavior. The researchers found that increases in state cigarette taxes reduced the
probability of a youth reporting having smoked in the past 30 days as well as a reduction
in the frequency of smoking. Also, one study found that higher cigarette prices decrease
the probability of smoking initiation in males, but not in females. The authors theorized
that this could be due to females worrying more about their weight (Cawley et al., 2004).
Thus, numerous studies have found that increases in price can reduce youth demand for
cigarettes.
Conversely, Philip DeCicca, Donald Kenkel and Alan Mathios have done
extensive research on the effect of taxes and higher prices on smoking. They found that
higher taxes are associated with higher rates of cessation but are not associated with
reduced initiation. They also concluded that in general, higher prices have weak, and
insignificant, effects on adolescents starting to smoke (DeCicca et al., 2002; DeCicca et
al., 2007; DeCicca et al., 2008). Similarly, Schnohr et al. (2008) investigated the effect of
national tobacco policies (more specifically, a smoking ban at educational facilities, price
increases, and minimum purchasing age restrictions) on tobacco use. They found that
bans at schools led to lower odds ratios of daily smoking. However, like DeCiccas
studies, they found no association between cigarette prices and adolescent daily smoking
prevalence. This is directly contradicting past research that young adults are more pricesensitive than other age groups. However, this studys results must be considered in
context. This study used cross-sectional data from adolescents in Europe, Israel, and

16

North America. There were 1500 participants divided into three age groups: 11, 13 and 15
year olds. The fact that this was cross-sectional, and not longitudinal could indicate that
the children at this time period are not particularly price-sensitive but over time they may
become more so thus validating other studies, such as Lewit et al (1981). Goel and
Nelson (2006) conducted an extensive review of the literature on the effect of price on
cigarette use. They ultimately conclude that while it seems as though increasing taxes can
be an effective way to lower tobacco consumption, further research is necessary. More
specifically, they note that a large number of studies on the topic do not control for nonprice policies (such as health warnings and advertising restrictions) and, as such, their
estimates of the effect of the tax policy could be biased. Therefore, there is no consensus
opinion on the effect of tobacco price changes on adolescent smoking decisions.
3.2 Youth smoking and susceptibility to advertisements
One of the reasons behind the advertising restrictions of the MSA was the
prevalence of smoking in children. According to a study by Monitoring the Future, in the
mid-1990s, as many as 20% of 8th graders (approximately 13 years old) had smoked in
the past 30 days and as many as 30% of 10th graders (approximately 15 years old) had
smoked during that same time frame. These numbers represented increases from the early
1990s when the rate was as low as 20% for 10th graders and 14% for 8th graders. During
the same time period, the number of children in 8th and 10th grade who saw smoking as a
dirty habit or as reflecting poor judgment decreased (Johnston et al., 2008). These
figures help to illustrate that before the Master Settlement Agreement, the prevalence of

17

teen smoking was not only rising, but children were beginning to change their views of
smoking as a bad habit.
One of the potential reasons for the aforementioned increases is youth
susceptibility to advertisements. Much research has been done on social norms and peer
effects but the most pertinent of these studies are those that relate advertising. Martin
Fishbein theorized that advertisements have a particularly potent effect on youth because
while ones personal attitudes towards smoking are influential in determining the onset of
smoking in adults, social norms are influential for adolescents. Advertisements can alter a
childs view of what it means to smoke and create positive role models for children.
Fishbein concluded that there can be little question that cigarette ads attempt to create a
positive image of the smoker (Fishbein, 1977).
Whether a childs family smokes is also important when assessing smoking
initiation and is connected to Fishbeins theory of social norms. Hill et al. (2005)
followed 808 children from age 10 to age 21 and assessed the effects of family factors on
daily smoking initiation. They found that even if parents tell their children not to smoke
and do not involve them in their own tobacco use, the children are still more likely to
commence smoking than someone not in that situation. They suggest that the best way for
parents to reduce the chance of their kids starting to smoke is to stop or reduce their own
smoking. Musick et al. (2007) found a similar result when they used 890 children ages
12-17 and observed the relationship between parental substance abuse and child
substance abuse. They also found that, more specifically, the actions of a teenagers
mother is particularly potent in such that a mothers smoking is positively associated with
teen smoking and her disapproval of marijuana/drinking is negatively associated with a

18

child engaging in these actions. Fleming et al. (2002) conducted a longitudinal study and
also found that having a parent who smokes increases the likelihood of smoking initiation
in children.
An important aspect of this empirical research is how exposure to advertisements
affects tobacco use. Botvin et al. (1993), surveyed students on their exposure to cigarette
advertisements and their smoking habits. Two years later, the students were reinterviewed
to determine if they had begun smoking. The researchers found that high exposure to
cigarette advertisements was predictive of both current smoking and future initiation.
Additionally, a longitudinal study investigated the effect of tobacco advertising and
promotional items on the likelihood that adolescents will start smoking. The researchers
found that both advertisements and promotional items (both current use and willingness
to use items in the future) were causally linked to the onset of smoking. The participants
in this study were randomly selected adolescents in California who had never smoked.
The promotional items were found to be more persuasive than advertisements, but both
were causally linked to the onset of smoking (Pierce et al., 1998; Altman et al., 1996).
These studies are particularly trustworthy due to their sample selection. Other studies
tend to have samples from a small region (for example, the southwestern United States)
but Altman et al., (1996) uses a sample drawn from the entire nation. This is particularly
important because it allows for a more accurate generalization of the population at large,
while it is more questionable to generalize from studies based in a small region. Schooler
et al. (1996) found a similar result in that children who have a tobacco promotional item
are 2.2 times more likely to experiment with tobacco. Additionally, seeing tobacco

19

advertisements in magazines increased the likelihood of experimenting by 21% and

seeing advertisements in stores increased the likelihood by 38%.
The connection between tobacco marketing and youth tobacco use was also
researched by Wellman et al. (2006). This study was a meta-analysis of 51 articles and
found that exposure to advertising and other marketing methods more than doubled a
childs risk of using tobacco. Youth who were exposed to cigarette advertisements were
also approximately 50% more likely to hold positive attitudes toward tobacco and were
twice as likely to begin smoking. Armstrong et al. (1990) conducted a randomized control
trial of 7th grade children and found that a significant effect on the smoking behavior of
children was the perceived response to cigarette advertising, with the children expressing
that their decisions were influenced by tobacco advertising. Similarly, Aitken et al. (1991)
interviewed 640 children, between the ages of 11 and 14, twice, with one year between
meetings. They found that children whose intentions to smoke became more positive over
the one year gap tended to be more aware of cigarette advertisements (compared to the
rest of the sample), and children whose intentions to smoke became more negative were
less appreciative of cigarette advertisements at the first interview (compared to the rest of
the sample). OLouglin et al. (2009) investigated the risk factors associated with teen
smoking initiation. They used approximately 650 children ages 12-13 that were given
questionnaires every three months for five years. The study investigated many risk
factors, among them susceptibility to tobacco advertising. This study also found that
advertising receptiveness was a risk factor for smoking initiation. This supports the
general body of research that awareness of advertisements is linked to tobacco use.

20

While these studies do find that advertisement exposure is linked to the onset of
smoking, it is not causal proof. While some may make causal conclusions, they lack the
ability to fully simulate the decision to start smoking. For instance, in the aforementioned
longitudinal studies, other factors that were not controlled by the researchers could have
also been strongly linked to the onset of smoking. Without an empirical study that
controls for all potential confounding variables, one cannot conclude with certainty that
advertising causes one to start smoking.
3.3 Youth smoking and brand recognition
Youth recognition of specific brands and advertisements in general are also linked
to smoking initiation. Evans et al. (1995) found that familiarity with cigarette advertising
and brands was more of a factor in smoking initiation than having friends and family who
smoke. This result occurred in children who were found to be high receptivity to
advertisements and those with low receptivity. Receptivity was determined by measuring
the childrens recognition of advertisements, if they had a favorite ad, could name a brand
they might purchase, owned a tobacco-related promotional item and were willing to use a
promotional item. In another study, Freeman et al. (2009) analyzed youth recognition of
advertising and its effect on smoking susceptibility. Children between the ages of 7 and
12 were asked to identify what an advertisement was attempting to sell. These answers
were then coded into three groups: no understanding, product category understanding (for
example, it is a cigarette advertisement), or brand advertising (for example, the
advertisement is trying to sell Marlboro cigarettes). The participants were asked do you
think you might try a cigarette soon? and if one of your favorite friends offered you a

21

cigarette, do you think you might try one? The answers were assessed on a four point
scale. Those that answered no way (the most negative response) were classified as
unsusceptible. This instrument was adapted from previous research. All other participants
were considered susceptible. Those who identified that an advertisement was promoting a
brand of cigarettes were 182% more susceptible to smoking. This study has issues that
must be acknowledged. More specifically, the researchers had a sample of only 271
participants, all of whom attended four public schools in the southwestern United States.
There are a number of problems with generalizing from the aforementioned sample.
Firstly, students who attend public school and private school are not the same and as such
could be differently affected by advertisements. Similarly, one cannot generalize findings
from the southwestern United States to other parts of the country. It is possible that
people in different areas of the country think and act different and as such a
generalization is not prudent. In most cases, the studies investigating youth recognition of
specific brands and advertisements face similar limitations to those mentioned above.
There is no way to control for all confounding variables. Without this step, one cannot
conclude how much recognition of an advertisement effects smoking incidence.
An important limitation to all of the above studies is a lack of causal inference.
Without this it is impossible to determine if the high youth smoking rates are a result of
cigarette advertising or merely a coincidence. Heckman et al. (2008) had this very
criticism of the body of research. They argue that there are three requirements for a study
to be used as evidentiary support of the contention that advertising is a causal factor in
youth smoking: valid measurements of smoking outcomes and the causal factors, controls
that account for other potential causes of smoking initiation (endogeneity), the study must

22

be replicable so that other researchers can follow and duplicate the analysis. They state
that much of the public health literature investigating the causal impact of advertising has
not used a strong theoretical framework and, as such, is severely limited and thus does
not meet the aforementioned criteria. He contends that econometric studies can fix some
of these problems because of their increased controls that the field incorporates. Thus, it
is not to say that the findings are necessarily incorrect but rather that one cannot accept
the conclusion as fact without more reliable, replicable, and sound research designs.
There is a large body of econometric studies of advertising expenditures. This
research has been previously reviewed by Gallet and List (2003) as well as Chaloupka
and Warner (2000). Gallet and List looked at 137 estimates of the effect of advertising
expenditures on cigarette demand and attempted to calculate an overall elasticity. They
found that the median advertising elasticity is .07 in the short run and .09 in the long run.
These numbers are extremely small for elasticities and indicate that changes in
advertising expenditures had a minimal impact on the demand for cigarettes. This
suggests that advertising does not have a strong effect on the desire to purchase tobacco
products. Similarly, Chaloupka and Warner reviewed many econometric analyses that
investigated the effects of advertising expenditures on tobacco use and found no
consensus concerning the effect of advertising on smoking. Andrews and Franke (1991)
conducted a meta-analysis of 24 studies. All of these studies were time-series analyses
that looked at the effect of advertising on cigarette demand. They concluded that there is
a positive and elastic relationship between advertising expenditures and demand for
tobacco products such that an increase in the former causes an increase in the latter. The
exact level of elasticity could not be pinpointed since it is affected by time, which varies.

23

Conversely, Saffer and Chaloupka (2000) contend that a comprehensive ban in OECD
could cause a 5.4% decrease in tobacco use and 7.4% decrease in cigarette use. They also
predict that in European countries, the eliminating of tobacco advertisements (which
occurred progressively from 2001 to 2006) could decrease tobacco consumption by 6.3%
and cigarette consumption by 7.9%. Thus, economic research is inconsistent with regard
to the effect of advertising on smoking initiation.
3.4 Aftermath of the MSA
Since the Master Settlement Agreement, researchers have attempted to determine
if companies were following the agreement and the effect the MSA has had on the
industry. There are three specific questions that they have addressed. The first is how
advertising expenditures have changed. King and Siegel (2001) observed that overall
advertising expenditures were increasing in the years shortly after the Master Settlement
Agreement and thus concluded that the MSA had little effect on cigarette advertising in
magazines. The study used data from 1995 to 1998 as the Pre-MSA expenditure figures
and data from 1999 and 2000 as the post-MSA expenditures. The following studies help
to explain this by using a data set that encompasses a larger time period and thus can
better demonstrate potential repercussions from the MSA. Viscusi and Hersch (2009)
agree with previous analyses that overall advertising expenditures rose after the MSA.
However, they note that if one limits their data to magazine advertisement expenditures,
the numbers decreased greatly from 1998 to 2005 (they found that expenditures
decreased by 87%). However, they also note that overall advertising and marketing
expenditures increased during that same span. They found that this increase was largely

24

due to expenses related to promotional allowances (for example, paying

retailers/wholesalers for using displays) and price discounts (giving retailers/wholesalers
discounts so that they could sell the cigarettes at a lower price) tripling over that time
period. This is an important fact since it illustrates that, despite the decrease in magazine
advertising, the cigarette companies still found ways to market their products.
The second question that research has sought to answer is whether all companies
responded to the MSA in the same way. Studies have found that Philip Morris and RJR
responded to the MSA in drastically different manners. Alpert et al. (2008) found that
overall magazine advertising expenditures fell by over 85% (from $365 million in 1998
to $53.1 in 2006). However, this number is skewed by the fact that Philip Morris, the
market leader, greatly decreased its expenditures in 2001 and then totally ceased
magazine advertisements in 2004. Other brands, such as RJ Reynolds, decreased their
spending in 2001 but later increased their expenditures in 2003 and 2004. The below
graph summarizes this information. Another study followed the cigarette advertisements
in Sports Illustrated and Rolling Stone from 1994 to 2006 and found a similar result.
Philip Morriss three major brands, Marlboro, Basic and Virginia Slims all decreased
their advertising presence in these magazines following the MSA. Conversely, RJRs
three main brands, Camel, Winston and Kool, increased their advertising presence in
these magazines following the MSA (Sung & Hennink-Kaminski, 2008). Hamilton et al.
(2002) postulate that the increase in advertising immediately after the MSA was a result
of advertising dollars being freed up by the MSAs ban on outdoor advertising. However,
this increase was heavily publicized and the public applied pressure on the companies to
decrease their youth targeting. This led to a decrease in advertising that was led by Phillip

25

Morris, which vowed to stop advertising in any magazine that has youth readership of
15% or more. RJ Reynolds refused to make this same pledge.

Alpert et al., 2008

The third topic that has been investigated is the change in advertising placed in
youth-oriented magazines. Alpert et al. (2008) used a Youth Index that determined the
level of youth exposure to cigarette advertisements as a number. This index was first
identified in a settlement agreement between the State of California and RJ Reynolds and
assesses the exposure of children ages 12-17 to advertisements as compared to the
general population. If the index is greater than 100, youth are disproportionately exposed
to the advertisements. Between the years 1998 and 2000, identified as the early postMSA years, all of the major manufacturers had an index of more than 100. However,
after 2002, the index of these same manufactures went below the 100 threshold and
stayed that way, except for RJR and Brown and Williamson (purchased by RJR later that
year) which had indexes of 104 and 103 respectively, in 2004. This data shows that
overall youth targeting seems to have fallen after the MSA but that not all firms reduced
their focus at the same time.
Since the MSA is a relatively recent event, few studies have had the opportunity
to analyze the effect of the MSA on smoking rates. One study that did conduct an
investigation was Sloan and Trogden (2004). They took a national sample from 1990 to
26

2002 and used it to create a model to estimate potential the decision to smoke cigarettes.
They found that, by 2002, smoking rates fell by 13% in the 18-20 and over 65 age groups
and by 5% in the 21-64 age group. It must be noted that it is difficult to create a model
that accurately predicts the decision to smoke cigarettes due to the plethora and
complexity of the factors influencing that choice. Thus, while this study did find a
sizeable decrease after the MSA, further studies are necessary to determine the true effect
of the MSA on smoking rates.
4. Hypotheses
This study aims to address two questions. Firstly, how did the number of
advertisements in general change both on a total number and individual company-level
following the Master Settlement Agreement? Secondly, how did the number of
advertisements in magazines with high youth exposure change on both a total and
company-level following the Master Settlement agreement? In regards to the first
question, I expect to find that overall advertisements will increase immediately following
the MSA and then decrease. This prediction is based on previous research (Hamilton et
al., 2002). Furthermore, I believe that RJ Reynolds will suffer show an immediate
decrease in advertisements and then an increase in number of advertisements while Philip
Morris will demonstrate an immediate increase in the number of advertisements and then
a decrease in the long-term as explained by Hamilton et al. (2002). RJR data will show an
immediate decrease because the MSA banned cartoon characters, a foundation of their
marketing plan, and Philip Morris data will increase the amount they advertise
immediately because of additional advertising funds made available by the MSAs ban on

27

outdoor advertisements. In regards to the second question, I believe that in magazines

with high youth exposure, overall advertisements will increase immediately after the
MSA and then decrease. Additionally, RJR will immediately decrease their
advertisements but then increase them in the post-MSA long run while Philip Morris will
immediately increase their advertisements and then decrease their advertising in the longrun. This is again based on the banning of the cartoon characters that were the foundation
of RJ Reynolds marketing plan and Philip Morris having additional advertising funds
available and the ensuing public backlash.
5. Data and Methods
5.1 Data
This analysis uses advertising data from the Smoking Cessation Advertisements
(SCADS) archive, which contains content from 26 consumer magazines and is described
in more detail in Avery et al. (2007). The archive was compiled by collecting all print
advertisements for tobacco products, smoking cessation products, as well as smokingrelated public service announcements (PSAs) that appeared between January 1985 and
October 2005. The difference between an advertisement and a PSA is that an
advertisement informs the reader about a product they can purchase (for example,
Marlboro cigarettes), while a PSA transmits a message or an idea (such as smoking is
unhealthy) to the reader. This study uses a subset of the overall database such that only
the cigarette advertisements will be included in the data analysis.
The magazines included in the archive include: Better Homes & Gardens, Black
Enterprise, Business Week, Cosmopolitan, Ebony, Essence, Family Circle, Glamour,

28

Good Housekeeping, Jet, McCalls/Rosies, Modern Maturity, Money, National

Geographic, Newsweek, People, Playboy, Readers Digest, Rolling Stone, Seventeen,
Sports Illustrated, Time, TV Guide, U.S. News & World Report, Vogue, and Womans Day.
Magazines were selected by determining the ten magazines with the highest readership
(as determined by the 1998 Simmons National Consumer Survey) in 22 groups that were
defined by race (3 groups), education (5 groups), income (5 groups), age (5 groups),
gender (2 groups), and smoking status (2 groups). Since people in these groups often read
similar magazines, the final set was comprised of 26 magazines, not the highest possible
total number of 220 magazines ( if there were no overlap in the readership of the 22
groups). For example, Time might be in the top ten in readership for both one of the
income groups and one of the education groups.
However, the 26 magazines used were not the 26 with the highest readership. For
three of the magazines with the highest readership, it was not possible to obtain every
issue. These three magazines were replaced with the next most read. Based on data from
the National Consumer Survey and Audit Bureau of Circulations 2003 Magazine Trend
Report, the 26 magazines actually used in the database constitute anywhere from 30% to
57.5% of overall magazine circulation in the United States. Some of the magazines
included in the SCADs data set did not have any cigarette advertisements. More
specifically, five of the magazines (Good Housekeeping, Readers Digest, Seventeen,
Modern Maturity, and National Geographic) did not have any cigarette advertisements
and thus were not used in this data analysis.
All advertisements in the data set were coded with the brand name, manufacturer,
length of the advertisement, placement in the magazine, and sponsor (for PSAs).

29

Undergraduate research assistants located the advertisements and then scanned them for
electronic storage. The research assistants then coded the advertisements for the above
information as well as content data (the number of people in the advertisements, type of
surgeon generals warning and the appeal of the advertisement etc.). Ten percent of the
issues of each magazine were independently checked by another research assistant. If an
error rate above 10% was found, all issues of that magazine were recoded. This process
was replicated until all magazines had an error rate below 10%. The number of pages of
advertisements for the products in the SCADs data was also compared to the advertising
expenditure data found from Competitive Media Reporting (CMR). A regression of
monthly advertising expenditures on the number of SCADs advertisements in that month
illustrates that the variation in the SCADs data explains most of the advertising changes
(R-squared = .94). More information on the SCADs data set can be founded in Avery et
al. (2007).
5.2 Econometric Model and Identification
The dependent variable in this analysis is the number of advertisements in a given
month t in magazine m. This can change as a result of the calendar month, which
magazines had advertisements that month, and if it was after the Master Settlement
Agreement. This study will use one regression equation with a few small variations. This
equation is:
Advertisements t,m = 0 + 1(Time) + 2(MSA) + 3(MSA*Time) + Month Dummies
+ Magazine Dummies +

30

The first independent variable, Time, is an indicator of when the advertisement

occurs. This variable ranges from 0 (January 1985) to 251 (December 2005). This
variable will allow me to determine if there is a significant change in the number of
advertisements over the course of the time period. The second independent variable,
MSA, is a dummy variable indicating if the advertisement occurred before or after the
Master Settlement Agreement. Since the settlement agreement was settled to at the end of
November 1998, advertisements in January 1999 will be the first to have a value of 1 for
this variable. January is used, in lieu of December, due to the delay intrinsic to
advertising: advertisements for December publications are due before early November.
However, it is still possible to make changes to an advertisement in a January publication
at the end of November. I also included dummy variables to account for changes in the
number of advertisements caused by the month of the year and the magazine in which the
advertisement appears.
This equation will allow me to test both my first hypothesis (the number of
advertisements will fall after the MSA) and third (the number of advertisements in
magazines with high youth exposure will fall after the MSA). The equation will be used
without omitting any data and as such, if 3 is significant and negative, I can conclude
that following the MSA, tobacco advertisements declined. The third hypothesis will be
tested in a similar manner but with the sample restricted such that only advertisements in
magazines with youth exposure will be included. Thus, 3 will measure the rate at which
the number of cigarette advertisements changed in youth exposure magazines following
the MSA.

31

In order to test hypotheses two and four, the sample will also be restricted.
Hypothesis two will be tested by running the regression equation twice, once with only
the data concerning Philip Morris advertisements and another time with only the data
concerning RJ Reynolds advertisements. This will also be done for hypothesis four, but
the data will be further constrained so that it is only the advertisements for the specific
companies in high youth exposure magazines.
A spline regression model was considered for this analysis but was ultimately
deemed counterproductive due to the nature of what is being tested. The Master
Settlement going into effect is likely to have an immediate effect on the advertising
market since some companies, such as RJ Reynolds, had marketing plans using practices
banned by the MSA. As such, they are likely to have immediate reactions to the MSA. A
spline regression would get rid of this immediate change which not only excludes a vital
part of the analysis of the MSAs impact but also has the potential to negatively influence
estimates of the long-term effects of the MSA.
6. Results
6.1 Descriptive Statistics
There were 25,459 advertisements in the data set. These advertisements were
distributed between 21 different magazines. Below is a table listing the magazines in
descending order by the average number of cigarette advertisements in an issue of the
magazine from January 1985 until October 1985.

32

Table 2. Average number of cigarette advertisements in each magazine issue, 1985-2005

Average number of cigarette
advertisements per issue
6.14
5.47
4.41
3.84
3.64
3.63
3.58
3.34
3.27
3.21
3.11
2.52
2.51
1.79
1.33
1.31
1.04
0.90
0.90
0.74
0.01

Magazine
Playboy
Cosmopolitan
Glamour
McCall/Rosie's
Better Homes & Gardens
Vogue
Ebony
Family Circle
People
Essence
Woman's Day
Sports Illustrated
TV Guide
Rolling Stone
Jet
Time
Newsweek
Money
Black Enterprise
US News & World Report
Business Week

The above table was created by dividing the total number of advertisements in
each magazine by the number of issues published during the time period. By using this
calculation as a means to rank the magazines, one can control for the frequency of release
of the magazines. For example, the results will not be deceptive and make it appear as
though Sports Illustrated had more advertisements than Playboy on a per-issue basis.
Figure 1 in the appendix contains a graph of the number of advertisements per
month from January 1985 until October 2005. The blue bars represent the number of
advertisements in each pre-MSA month and the red bars the number of advertisements in
each post-MSA month. Descriptively, the data shows an overall downward trend. Long
before the MSA, the number of cigarette advertisements was falling. The greatest number
of advertisements occurred in January 1986, when there were 269 advertisements.
Following that month, the number of advertisements fell greatly before leveling off and
33

varying between approximately 150 and 200 advertisements per month, through February
1988, when the number dropped to 131 advertisements. Subsequently the number
increased again but, after June 1989 the number of advertisement plummeted until
reaching a low of 29 advertisements in February 1994. The number started to fluctuate
again but never again reached the 200 advertisement plateau. All in all, the general trend
was already a decrease in the number of advertisements years before the MSA was agreed
upon by the state attorneys general and the tobacco industry.
There are a number of potential explanations for the large fall in advertisements in
the late 1980s and early 1990s. During this same time period, tobacco companies simply
spent less on magazine advertisements. In 1985, tobacco companies spent approximately
$400 million (or 16%) of their advertising and promotional expenditures/budgets on
magazines but by 1993, this number was as low as approximately $235 million (or 3.9%).
At the same time, overall advertising expenditures were increasing as companies were
spending more money on promotional allowances which increased from about $630
million (26.4%) in 1986 to $1.9 billion (38.1%) in 1995. The diversion of funds to other
advertising methods would account for the large drop in the number of print
advertisements. In fact, 1993 is one of the lowest advertising years during the pre-MSA
advertising period and 1999 one of the highest (after 1990). The latter coincides with one
of the highest expenditures of $377 million. The above trend, as well as the large drop off
in magazine expenditures after 1999, coincides with the data represented in Appendix 1
(Federal Trade Commission, 2009).
6.2 The effect of the MSA on tobacco advertisements in all magazines

34

The first hypothesis tested was that overall advertisements would increase
immediately following the MSA and then decrease. Table 3 (below) contains the
regression results for this analysis and for the analysis for hypothesis 3.
Table 3. Coefficients for Regressions investigating Hypotheses 1 and 3
Variable
Constant
Time
MSA
Slope
R2

All Magazines
(1)
9.403**
(38.14)
-.047**
(-46.59)
2.269**
(3.55)
-.001
(-.34)
.6677

Youth Exposure
Magazines
(4)
16.226**
(44.53)
-.047**
(-25.21)
7.875**
(6.75)
-.032**
(-5.54)
.6412

NOTE. Other controls include the month the advertisements appeared (11 categories in both regressions)
and the magazines they appeared in (20 categories in regression 1 and 7 categories in regression 3).
Regression 1 had 5,229 observations and regression 4 had 1.992 observations.
* Statistical significance of coefficient estimates for p-values .10
** Statistical significance of coefficient estimates for p-values .001

The models reported in Table 3 include a diverse set of control variables.

Regression 1 has controls for both the month in which the advertisement appeared as well
as the magazine it appeared in. Regression 3 also has controls for the above but uses a
subset of the overall set of magazines (only 8 magazines compared to the 21 used in
regression 1).
The hypothesis was supported by the data analyzed. A positive, and significant,
coefficient on the MSA variable illustrates an increase in the number of advertisements
once the MSA went into effect. More specifically, there was an average increase of 2.269
advertisements in January 1999. Also the slope variable (which represents the MSAs
effect on the trend of advertisements) was not significant. If it were, it would have had a
minimal effect on the overall trend since it would only have increased the rate at which
35

advertisements fell by .001 per month, a negligible effect. In order to easily analyze the
effect of the MSA, one can compare the data from the month the MSA went into effect
(January 1999) with that of five years later (January 2004). Based on the regression, the
number of advertisements in January 1999 was 1.805 advertisements and the number of
advertisements in January 2004 was -1.035 (signaling that there were no more
advertisements). It is important to note that these numbers use the insignificant slope
coefficient. Therefore, the MSA did initially cause an increase in advertisements but this
increase was counteracted by the generally negative trend. In fact, by February 2003,
there were fewer advertisements (1.407) than in December 1998 (1.545). Thus, the first
hypothesis is supported by the results of this study.
6.3 The different reactions to the MSA by RJR and Philip Morris in all magazines
The second hypothesis tested was that RJ Reynolds would incur an immediate
decrease in their number of advertisements and then an increase and that Philip Morris
would have an immediate spike in advertisements and then a decrease. Table 4 (below),
contains the regressions results for this analysis as well as for the regressions with which
to analyze the fourth hypothesis.

36

Table 4. Coefficients for Regressions investigating Hypotheses 2 and 4

Variable

Constant
Time
MSA
Slope
R2

All Magazines
Philip
RJ
Morris
Reynolds
(2)
(3)
3.773**
4.019**
(29.72)
(28.99)
-.013**
-.023**
(-25.30)
(-40.06)
3.116**
-1.664**
(9.60)
(-4.63)
-.017**
.0157**
(-10.24)
(8.79)
.5276
.5399

Youth Exposure Magazines

Philip Morris RJ Reynolds
(5)
(6)
5.335**
(29.80)
-.006**
(-6.99)
6.641**
(11.59)
-.040**
(-13.95)
.4990

6.943**
(32.75)
-.024**
(-22.66)
-1.284*
(-1.89)
.015**
(4.37)
.4863

NOTE. Other controls include the month the advertisements appeared (11 categories in both regressions)
and the magazines they appeared in (20 categories in regression 1 and 7 categories in regression 3).
Regressions 2 and 3 both had 5,229 observations and regressions 5 and 6 both had 1.992 observations.
* Statistical significance of coefficient estimates for p-values .10
** Statistical significance of coefficient estimates for p-values .001

This hypothesis is entirely supported by the model above. As expected, Philip

Morris greatly increased their advertisements but then they quickly decreased the number
in each subsequent month (before the MSA, the number of advertisements decreased by
an estimated .013 per month, after the MSA that slope increased to .03 advertisements per
month). Conversely, RJ Reynolds immediately decreased their estimated number of
advertisements but then had a post-MSA slope that was positive, indicating that they were
adding more advertisements, at a rate of .0157 advertisements per month. However,
because of the nature of this model, the true slope for the model after the MSA is the sum
of the slope and constant coefficients, which in this case is still negative, but is minute
(only .0073). In fact, this coefficient is so small that it would take approximately 11 years
for RJ Reynolds to have an estimated number of advertisements decrease by 1. The
radical difference between the approaches the two companies took had long-term
ramifications on the market. Based on this data, it would take approximately 210 months,
37

or 17.5 years, for the difference in advertisements between Philip Morris and RJR to
reach their pre-MSA levels. Figures 2 and 3 in the appendix depict the change in the
number of advertisements for RJ Reynolds and Philip Morris and illustrate the trend the
model represents.
A good way to compare the trends of each of the companies is to compare the
number of advertisements placed in January 1999 to those in January 2004, a five year
difference. In the first time period, Philip Morris placed an estimated 3.836
advertisements and RJ Reynolds 2.282, indicating, according to the model, they had
already stopped advertising. We know that in reality, they had not stopped advertising but
this estimation of the number of advertising is not surprising. At the onset of the data set,
RJR was greatly decreasing their advertising. Thus, the regression must account for this
when creating a model and, as such, the regression hits the x-axis (indicating an expected
number of advertisements of 0) well before RJR actually stopped advertising. In fact,
according to the model, the decrease in advertisements resulting from the MSA put RJ
Reynolds below the x-axis (in December 1998, RJR had an estimated number of
advertisements of .220). After five years, Philip Morris placed, on average, 2.093
advertisements, and RJR had an expected number of advertisements of -2.697.
6.4 The effect of the MSA on tobacco advertisements in youth exposure magazines
The third hypothesis was tested in youth exposure magazines, it was expected that
the number of advertisements would first rise, then fall after the enactment of the Master
Settlement Agreement. The estimation of the model used to test this can be seen above in
Table 3. This hypothesis is supported by the estimated model; namely, the MSA variable

38

was positive and significant and demonstrates an approximate increase of 7.875

advertisements once the MSA went into effect. Additionally, following the MSA the
number of advertisements started falling more rapidly as a result of a negative slope with
a larger magnitude. The original rate was -.047 advertisements per month. After the MSA
that rate increased to -.078 advertisements per month (this number was computed by
combining the coefficients on time and slope). A good way to get an idea of the result
of these changes is to look at the number of ads in January 1999 and January 2004. In the
former period, there were approximately 13.572 advertisements, in the latter
approximately 8.931. The increased rate at which advertisements fell after the MSA in the
youth exposure magazines helped to lower the overall number of advertisements but,
within this studys dataset, it was never able to fully counteract/counterbalance the
increase in the MSA variable. It would take approximately 8 years, 8 months and 5 days
to counteract this increase but the dataset only has data extending to October 2005, short
of the above milestone.
It was theorized that there would be an increase in the number of advertisements
following the Master Settlement Agreement, but the magnitude of this change was
particularly surprising. The number of advertisements almost doubled between December
1998 and January 1999 as a result of what would seem to be the Master Settlement
Agreement. One possible explanation for this abnormally large increase is that the
tobacco conglomerates sought to immediately determine the effectiveness of post-MSA
advertising. As such, there was a large increase in January 1999. However, shortly
afterwards the firms decided that further advertising was not beneficial and reduced the
amount of advertising they were placing in all magazines. Another possible explanation is

39

that tobacco companies greatly increased their advertising presence in these magazines
shortly after the MSA so as to test the waters and effectiveness of advertising under the
new regulations of the MSA. As in the first explanation, the companies deemed the
advertisements to be ineffective and pulled them, contributing to the significantly more
rapid rate of decrease in the advertisements. Nevertheless, directly after the MSA the
number of advertisements in youth exposure magazines greatly increased but the rate at
which the number of magazines fell increased as well.
6.5 The different reactions to the MSA by RJR and Philip Morris in youth exposure
magazines
The fourth hypothesis tested was that in youth exposure magazines, RJ Reynolds
would immediately decrease their number of advertisements after the MSA but increase
them in the long term; and that Philip Morris would react conversely by immediately
increasing their number of advertisements and then, in the long term, decreasing them .
Table 4 (above), contains the regressions results for this analysis.
This hypothesis was also fully supported by the model. As predicted, RJ Reynolds
immediately decreased their number of advertisements but then increased them in the
long run. In fact, RJ Reynolds decreased their number of advertisements by an estimated
1.684 advertisements in January 1999. Afterwards, RJ Reynolds had a positive slope of .
015, indicating that after the MSA they were increasing the number of advertisements
by .015 per month. However, this coefficient was overpowered by a negative coefficient
in time with a greater magnitude. As such, the net slope of RJR after the MSA was still
negative, but minimal (advertisements decreased by approximately .009 advertisements
per month). Conversely, Philip Morris greatly increased their number of advertisements
40

in January 1999. The company added 6.641 advertisements in January 1999, more
advertisements than they had started with in January 1985 (according to the model).
However, they had a radical increase in the rate at which the number of their
advertisements fell. Before the MSA, advertisements were decreasing at an approximate
rate of .006 per month, essentially no decrease. After the MSA, that rate increased to .
046, over a 600% increase.
Figures 4 and 5 in the appendix are graphs of the number of advertisements by
each of the manufacturers throughout the time period and illustrate where the models
coefficients come from. A good way to see the true effects of these coefficient changes is
to examine the number of advertisements each company had in January 1999 and January
2004. In January 1999, Philip Morris placed an estimated 9.956 advertisements while
RJR placed an estimated .461 advertisements. After five years, Philip Morris had an
estimated 7.242 advertisements while RJR an estimated -.070 advertisements. Over those
five years, Philip Morris decreased their advertising by approximately 2.5 advertisements
while RJR did not decrease theirs by even one advertisement
7. Discussion and Conclusions
The results of this study reaffirm some aspects of previous research but also bring
new information to light. Numerous studies have found that following the Master
Settlement magazine advertising decreased. Some of these studies have determined this
by analyzing magazine advertising expenditure data (Alpert et al., 2008; Viscusi and
Hersch, 2009). However, that method does not take into account changes in the cost of
advertising or increased efficiency in the creation and publication of advertisements.

41

Nevertheless, this studys findings are generally consistent with the previously mentioned
findings. Aside from the increase that coincided with the MSA going into effect, the
number of advertisements did indeed fall. However, this study was unable to conclude
that the MSA caused the magazine advertisements to fall at a faster rate. The first model
found that between 1985 and 2005, advertisements fell at an average rate of .047 per
month but did not find that the above decline increased after the MSA. This is an
interesting result, in that the lack of an increase in the rate is not contradicted by past
research but, at the same time, one would have thought the MSA would have had more of
an effect. Evidently, the large decreases in magazine advertisements, such as the 85%
decrease between 1999 and 2006 from Alpert et al. (2008), were not a result of the MSA,
but of the generally decreasing trend that dates back to at least 1985. Therefore, this study
helps illuminate the context of previous research that believed the MSA was responsible
for the decrease in magazine advertising and, on the contrary, suggests that the decrease
actually had little to do with the MSA.
Past research clearly indicated that Philip Morris and RJ Reynolds reacted to the
Master Settlement Agreement in different ways. The results of this study are no different.
These studies found that after the Master Settlement Agreement, Philip Morris decreased
their advertising presence but RJ Reynolds increased it (Alpert et al., 2008; Sung &
Hennink-Kaminski, 2008). Interestingly, this study found an interesting addition to the
above conclusion. Following the MSA, Philip Morris did, in the long run, decrease their
advertising presence in magazines. However, in January 1999, they first greatly increased
their magazine presence. Following that increase, the rate at which they pulled their
advertisements doubled but the increase is still noteworthy. In fact, according to the

42

model it took over 8 years for Philip Morris advertisement total to reach the point it had
been in December 1998. Thus, the decreased advertising presence of Philip Morris is
deceiving at face value. They may have rapidly decreased their number of advertisements
but only after having increased their estimated number by approximately 200%.
Conversely, previous studies found that RJR at first lowered their number of
advertisements (following the MSA) but then raised the total (Alpert et al., 2008; Sung &
Hennink-Kaminski, 2008). This would help explain the coefficients found when
modeling RJRs advertising rates. Both of the models that used only RJR advertisement
data (regressions 3 and 6), found that right after the MSA, the company lowered its
estimated number of advertisements by either 1.284 advertisements or 1.664
advertisements (depending on the inclusion of all magazines or only youth-exposure
ones). The rate at which their advertisements then fell decreased to an almost negligible
level due to a positive value of the coefficient on the slope variable. It is likely that this
coefficient was positive because of the large increase that was reported in previous
research, and found in this study. Thus, this study found results similar to those of
previous studies in that RJ Reynolds and Philip Morris reacted to the Master Settlement
Agreement in different manners.
Another main focus of this study was the effect of the MSA on advertisements in
youth-exposure magazines. Previous research found that after the MSA, youth exposure
remained high but fell after 2002, to the point where only RJR and Brown and
Williamson ( later purchased by RJR) were deemed to have high youth exposure
(Alpert et al., 2008). The results of this study are consistent with the general trend of the
industry described above. The model used to estimate the number of advertisements in

43

youth-oriented magazines found that after the MSA, the number of advertisements
increased by approximately 7.875 but, the rate at which advertisements fell nearly
doubled as well, helping to offset this change. While that is a large increase, it is not that
large in the context of the model. The constant term in the model is 16.226, the largest in
any of the models. In the other models, the MSA variable was similar in magnitude to the
constant term so the increase it caused in January 1999 was significant. However, in this
case the increase caused by the MSA is much smaller than the constant term. Although
the increase is not totally consistent with the trend previous research of youth-magazines
has found, it is consistent with the trend found in the overall body of literature. As
previously stated, after the MSA the number of advertisements increased before sharply
falling and subsiding to a minimal level. The trend found in this model is comparable in
that there is, at first, a large increase and then the rate at which the advertisements
decrease almost doubles, thus signifying the sharp fall.
Previous studies have also analyzed the way Philip Morris and RJ Reynolds
reacted to the MSA within youth-exposure magazines. Alpert et al. (2008) found that
between 1998 and 2008, RJR consistently targeted youth with advertising, more than any
other company except one (Brown and Williamson targeted them more in 2000) in each
year. Conversely, in most years, Philip Morris was at the bottom of this measure. The
model generated in this study found that overall Philip Morris targeted the youth market
more heavily. Once the MSA came into effect, Philip Morris increased their advertising
by approximately 6.641 advertisements but also greatly increased their slope (from .06
to .046). Though seemingly a large slope increase, at that rate, it would take
approximately 12 years before the 6.641 increase is reversed and Philip Morris could

44

reach the same advertisement level as before the MSA. Conversely, RJ Reynolds
decreased their advertisements after the MSA by about 1.284 advertisements but had a
positive post-MSA slope value. Nevertheless, the coefficient was not enough to
overpower that of the general slope so the net slope of the RJR advertisement line after
the MSA remained negative. This denotes a drastically different picture of RJ Reynolds
than previous research has found. According to the data, RJR actually decreased their
presence in magazines with high youth-exposure while Philip Morris increased theirs. A
likely reason for RJRs coefficients is that the MSA outlawed a primary part of RJRs
advertisements: Joe Camel. Thus, in January 1999 they had to decrease their
advertisements and spend time devising a new strategy. Once implemented, the company
significantly increased their advertisements, but not enough to make the coefficient on
slope large enough to outweigh the coefficient on time, therefore resulting in a net
negative post-MSA slope. In sum, the results of this study are at odds with previous
research regarding the tactics used by RJ Reynolds and Philip Morris after the Master
Settlement Agreement.
This study has a number of limitations. First, the data stops in October 2005. The
data set goes back to over a decade before the Master Settlement Agreement but has little
data afterwards. When analyzing the effect of a policy, it is important to get an accurate
picture of the situation both before and after the policy is enacted. However, since the
MSA was only enacted 11 years ago, it is difficult to have the added pertinent data due to
the time necessary to input and process it. Nonetheless, more data would help obtain
more accurate coefficients in the model and give more insight into the effect of the
regulations on the tobacco advertising market. Additionally, it would be interesting if this

45

study was replicated using information that included the cost of advertisements. A
possible confounding variable in this analysis is that increases in the costs of advertising
(both in the formulation of advertisements and magazines raising their fees) could have
caused some of the decrease in advertising throughout the entire data set. The current
models are accurate models (each one having a relatively high r-squared) but there is
room for improvement with the addition of the aforementioned controls which would
allow one to better analyze the true effect of the MSA on the advertising market. A third
limitation is that it is difficult to determine exactly when the MSA first affected the
market. This study uses January 1999; a month and a half after the MSA went into effect,
as the starting point of analysis. This time was chosen after speaking with a number of
marketing experts on the amount of time it takes to alter the advertisements in magazines
in relation to when magazines go to print. However, it is conceivable that the companies
knew about the forthcoming regulations in August 1998 and, as such, the impact of the
MSA was beginning to be felt as early as November 1998. Further insight into when the
MSA started to transform the market would also help determine the true effect of the
MSA.
This study found that the MSA caused an immediate increase in the number of
advertisements followed, in most cases, by an increase in the rate at which
advertisements fell. Additionally, a stark difference between the way RJ Reynolds and
Philip Morris reacted to the Master Settlement Agreement was determined in that RJ
Reynolds immediately decreased their number of advertisements and they lowered the
rate at which they were leaving the market to a negligible level. Conversely, Philip
Morris significantly increased their advertisements following the MSA but in the long run

46

they decreased their advertisements more rapidly. The above was also found to be true
within magazines with high youth exposure, except that the baseline number of
advertisements and the increases caused by the MSA were much larger in magnitude,
suggesting that the MSA may not have completely prevented the companies from
marketing towards youth. In the short run, the MSA was unsuccessful in that
advertisements actually increased but it was successful in the long run because it
contributed to the speed with which the number of advertisements fell.

47

Works Cited
Aitken, P. P., D. R. Eadie, G. B. Hastings, and A. J. Haywood. 1991. Predisposing effects
of cigarette advertising on childrens intentions to smoke when older. British Journal
of Addiction 86, (4): 383-90.
Alpert, Hillel R., Howard K. Koh, and Gregory N. Connolly. 2008. After the master
settlement agreement: Targeting and exposure of youth to magazine tobacco
advertising. Health Affairs 27, (6): W503-12.
Altman, David G., Douglas W. Levine, Remy Coeytaux, John Slade, and Robert Jaffe.
1996. Tobacco promotion and susceptibility to tobacco use among adolescents aged
12 through 17 years in a nationally representative sample. American Journal of
Public Health 86, (11): 1590.
Americans for Nonsmokers Rights. 2009. Smokefree lists, maps, and data.
http://www.no-smoke.org/goingsmokefree.php?id=519 (Accessed December 2,
2009).
Andrews, Rick L., and George R. Franke. 1991. "The Determinants of Cigarette
Consumption: A Meta-Analysis." Journal of Public Policy & Marketing 10, (1): 81100.
Armstrong, B. K., N. H. Deklerk, R. E. Shean, D. A. Dunn, and P. J. Dolin. 1990.
Influence of education and advertising on the uptake of smoking by children.
Medical Journal of Australia 152, (3): 117-24.
Avery, Rosemary, Donald Kenkel, Dean Lillard, and Alan Mathios. 2007. Regulating
advertisements: The case of smoking cessation products. Journal of Regulatory
Economics 31, (2) (Apr): 185.
Borio, Gene. 2001. Tobacco Timeline.
http://www.tobacco.org/resources/history/Tobacco_History18.html (Accessed
February 1, 2010).
Botvin, G. J., C. J. Goldberg, E. M. Botvin, and L. Dusenbury. 1993. Smoking-behavior
of adolescents exposed to cigarette advertising. Public Health Reports 108, (2): 21724.
Brandt, Allan M. 2007. The cigarette century: the rise, fall and deadly persistence of the
product that defined America. New York: Basic Books.
British Broadcasting Corporation. 2006. Higher tobacco age limit in force.
http://news.bbc.co.uk/2/hi/uk_news/7021320.stm (Accessed December 9, 2009).

48

British Broadcasting Corporation. 2009. Smoking curbs: the global picture.

http://news.bbc.co.uk/2/hi/3758707.stm (Accessed December 9, 2009).
Canadian Broadcasting Corporation. 2005. Ontario hikes cigarette taxes.
http://www.cbc.ca/canada/story/2005/01/18/ontario-cigarette050118.html (Accessed
December 9, 2009).
Carpenter, Christopher, and Philip J. Cook. 2008. Cigarette taxes and youth smoking:
New evidence from national, state, and local youth risk behavior surveys. Journal of
Health Economics 27, (2): 287-99.
Cawley, John, Sara Markowitz, and John Tauras. 2004. Lighting up and slimming down:
The effects of body weight and cigarette prices on adolescent smoking initiation.
Journal of Health Economics 23, (2): 293-311.
Center for Disease Control. 2008. Smoking-attributable mortality, years of potential life
lost, and productivity loses --- United States, 2000-2004. Morbidity and Mortality
Weekly Report 57, (45): 1226-8.
Center for Disease Control. 2009a. Federal and state cigarette excise taxes --- United
States, 1995--2009. Morbidity and Mortality Weekly Report 58, (19): 524-7.
Center for Disease Control. 2009b. Sustaining state programs for tobacco control data
highlights 2006.
http://www.cdc.gov/Tobacco/data_statistics/state_data/data_highlights/2006/index.ht
m (Accessed October 1, 2009).
Chaloupka, Frank J., and Kenneth E. Warner. 2000. Chapter 29: the economics of
smoking. In Handbook of Health Economics., ed. Anthony J. Culyer and Joseph P.
Newhouse. Vol. Volume 1, Part 2, 1539-1627.
DeCicca, Philip, Don Kenkel, and Alan Mathios. 2008. Cigarette taxes and the transition
from youth to adult smoking: Smoking initiation, cessation, and participation.
Journal of Health Economics 27, (4) (7): 904-17.
DeCicca, Philip, Donald Kenkel, and Alan Mathios. 2002. Putting out the fires: Will
higher taxes reduce the onset of youth smoking? The Journal of Political Economy
110, (1) (Feb.): 144-69.
DeCicca, Philip, Donald Kenkel, Alan Mathios, Yoon-Jeong Shin, and Jae-Young Lim.
2008. Youth smoking, cigarette prices, and anti-smoking sentiment. Health
Economics 17, (6): 733-49.
DiRocco, Danae N., and William G. Shadel. 2007. Gender differences in adolescents'
responses to themes of relaxation in cigarette advertising: Relationship to intentions
to smoke. Addictive Behaviors 32, (2): 205-13.
49

Emmons, K. M., I. Kawachi, and G. Barclay. 1997. Tobacco control: A brief review of its
history and prospects for the future. Hematology-Oncology Clinics of North America
11, (2): 177-95.
Evans, N., A. Farkas, E. Gilpin, C. Berry, and J. P. Pierce. 1995. Influence of tobacco
marketing and exposure to smokers on adolescent susceptibility to smoking. Journal
of the National Cancer Institute 87, (20): 1538-45.
Federal Trade Comission. 2009. Federal Trade Commission cigarette report for 2006.
http://www.ftc.gov/os/2009/08/090812cigarettereport.pdf (Accessed December
16, 2009).
Fishein, Martin. 1977. Consumer beliefs and behavior with respect to cigarette smoking:
a critical analysis of the public literature. Report to the Federal Trade
Commission. http://tobaccodocuments.org/women/TIMN0240072-0194.html
(Accessed December 6, 2009).
Fleming, Charles B., Hyoshin Kim, Tracy W. Harachi, and Richard F. Catalano. 2002.
Family processes for children in early elementary school as predictors of smoking
initiation. Journal of Adolescent Health 30, (3): 184-9.
Freeman, Dan, Merrie Brucks, Melanie Wallendorf, and Wendy Boland. 2009. Youths'
understandings of cigarette advertisements. Addictive Behaviors 34, (1): 36-42.
Gallet, Craig A., and John A. List. 2003. Cigarette demand: A meta-analysis of
elasticities. Health Economics 12, (10): 821-35.
Goel, Rajeev K., and Michael A. Nelson. 2006. The effectiveness of AntiSmoking
legislation: A review. Journal of Economic Surveys 20, (3): 325-55.
Hamilton, James L. 1972. The demand for cigarettes: Advertising, the health scare, and
the cigarette advertising ban. The Review of Economics and Statistics 54, (4): 40111.
Hamilton, W. L., D. M. Turner-Bowker, C. C. Celebucki, and G. N. Connolly. 2002.
Cigarette advertising in magazines: The tobacco industry response to the master
settlement agreement and to public pressure. Tobacco Control 11, (2): 54-8.
Heavey, Susan, 2009. FDA, in first tobacco action, bans flavors.
http://www.reuters.com/article/domesticNews/idUSTRE58L6PX20090922
(Accessed September 25, 2009).
Heckman, J., F. Flyer, and C. Loughlin. 2008. An assessment of causal inference in
smoking initiation research and a framework for future research. Economic Inquiry
46, (1): 37.

50

Hill, Karl G., J. David Hawkins, Richard F. Catalano, Robert D. Abbott, and Jie Guo.
2005. Family influences on the risk of daily smoking initiation. Journal of
Adolescent Health 37, (3): 202-10.
Johnston, L. D., P. M. O'Malley, J. G. Bachman, & J.E. Schulenberg. 2008. More good
news on teen smoking: Rates at or near record lows. University of Michigan News
Service: Ann Arbor, MI. http://www.monitoringthefuture.org (Accessed November
20, 2009).
Johnston, L. D., P. M. O'Malley, J. G. Bachman, & J.E. Schulenberg. 2009. Smoking
continues gradual decline among U.S. teens, smokeless tobacco threatens a
comback. University of Michigan News Service: Ann Arbor, MI.
http://www.monitoringthefuture.org (Accessed April 30, 2010).
Katzman, Brett, Sara Markowitz, and Kerry Anne McGeary. 2007. An empirical
investigation of the social market for cigarettes. Health Economics 16, (10): 102539.
King, Charles,III, and Michael Siegel. 2001. The master settlement agreement with the
tobacco industry and cigarette advertising in magazines. The New England Journal
of Medicine 345, (7): 504-11.
Lewit, Eugene M., Douglas Coate, and Michael Grossman. 1981. The effects of
government regulation on teenage smoking. Journal of Law and Economics 24, (3,
Consumer Protection Regulation: A Conference Sponsored by the Center for the
Study of the Economy and the State) (Dec.): 545-69.
Musick, Kelly, Judith A. Seltzer, and Christine R. Schwartz. 2008. Neighborhood norms
and substance use among teens. Social Science Research 37, (1) (3): 138-55.
Nelson, Jon P. 2006. Cigarette advertising regulation: A meta-analysis. International
Review of Law and Economics 26, (3): 195-226.
O'Loughlin, Jennifer, Igor Karp, Theodoro Koulis, Gilles Paradis, and Joseph DiFranza.
2009. Determinants of first puff and daily cigarette smoking in adolescents.
American Journal of Epidemiology 170, (5): 585-97.
Office of National Statistics. 2009. Results from the General Household Survey (GHS).
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=5756 (Accessed December
10, 2009).
Office of the Attorney General of California. 2009. Master Settlement Agreement.
http://www.ag.ca.gov/tobacco/msa.php. (Accessed December 4, 2009)

51

Olstad, Scott. 2009. A brief history of cigarette advertising.

http://www.time.com/time/nation/article/0,8599,1904624,00.html. (Accessed
October 1, 2009).
Pierce, John P., Won S. Choi, Elizabeth A. Gilpin, Arthur J. Farkas, and Charles C. Berry.
1998. Tobacco industry promotion of cigarettes and adolescent smoking. JAMA: The
Journal of the American Medical Association 279, (7): 511-5.
Redhead, Stephen. 1999. RL30058: Tobacco Master Settlement Agreement (1998):
overview, implementation by states, and congressional issues.
http://ncseonline.org/nle/crsreports/agriculture/ag-55.cfm (Accessed February 1,
2010).
Saffer, Henry, and Frank Chaloupka. 2000. The effect of tobacco advertising bans on
tobacco consumption. Journal of Health Economics 19, (6): 1117-37.
Schnohr, Christina W., Svend Kreiner, Mette Rasmussen, Pernille Due, Candace Currie,
and Finn Diderichsen. 2008. The role of national policies intended to regulate
adolescent smoking in explaining the prevalence of daily smoking: a study of
adolescents from 27 European countries. Addiction 103, (5): 824-831.
Schooler, Caroline, Ellen Feighery and June A. Flora. 1996. Seventh graders selfreported exposure to cigarette marketing and its relationship to their smoking
behavior. American Journal of Public Health 86, (9): 1216-21.
Shadel, William G., Shannah Tharp-Taylor, and Craig S. Fryer. 2009. How does exposure
to cigarette advertising contribute to smoking in adolescents? the role of the
developing self-concept and identification with advertising models. Addictive
Behavior 34, (11): 932-7.
Shafey O, S Dolwick, and GE Guindon, eds. 2003. Tobacco Control Country Profiles
2003, American Cancer Society, Atlanta, GA.
Siahpush, Mohammad, Melanie A. Wakefield, Matt J. Spittal, Sarah J. Durkin, and
Michelle M. Scollo. 2009. Taxation reduces social disparities in adult smoking
prevalence. American Journal of Preventive Medicine 36, (4): 285-91.
Sloan, Frank A., and Justin G. Trogdon. 2004. The impact of the master settlement
agreement on cigarette consumption. Journal of Policy Analysis and Management
23, (4): 843-55.
Sloan, Frank A., V. Kerry Smith, and Donald H. Taylor. 2002. Information, addiction, and
bad choices: Lessons from a century of cigarettes. Economics Letters 77, (2): 14755.

52

Sung, Y., and H. Hennink-Kaminski. 2008. The master settlement agreement and visual
imagery of cigarette advertising in two popular youth magazines. Journalism and
Mass Communication Quarterly 85, (2): 331-52.
Tobacco Manufacturers Association. 2008. EU cigarette price & tax burden July 2008.
http://www.the-tma.org.uk/page.aspx?page_id=35 (Accessed December 10, 2009).
U.S. Congress. House. Committee on Energy and Commerce. 1994. Hearing on the
regulation of tobacco products. 103rd Cong., 2nd sess., April 14.
Viscusi, W. K. and J. Hersch. 2009. Tobacco regulation through litigation: the master
settlement agreement. National Bureau of Economic Research Working Paper No.
15422, 2009. http://www.nber.org/papers/w15422, (accessed October 20, 2009).
Warner, K. E. 1989. Effects of the antismoking campaign: An update. American Journal
of Public Health 79, (2): 144-51.
Wellman, Robert J., David B. Sugarman, Joseph R. DiFranza, and Jonathan P. Winickoff.
2006. The extent to which tobacco marketing and tobacco use in films contribute to
children's use of tobacco - A meta-analysis. Archives of Pediatrics & Adolescent
Medicine 160, (12): 1285-96.
White, Victoria, Bernice Webster, and Melanie Wakefield. 2008. Do graphic health
warning labels have an impact on adolescents' smoking-related beliefs and
behaviours? Addiction 103, (9): 1562-71.
Wilson, Duff., 2009. Senate approves tight regulation over cigarettes. New York Times,
June 12.

53

Appendix

54

55

56