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Assessing the sales impact of plain packaging regulation for cigarettes: Evidence from Australia

Bonfrer, André, Chintagunta, Pradeep K., Roberts, John H. and Corkindale, David 2020, Assessing the sales impact of plain packaging regulation for cigarettes: Evidence from Australia, Marketing Science, vol. 39, no. 1, pp. 234-252, doi: 10.1287/mksc.2019.1164.

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Title Assessing the sales impact of plain packaging regulation for cigarettes: Evidence from Australia
Author(s) Bonfrer, AndréORCID iD for Bonfrer, André orcid.org/0000-0002-3061-7103
Chintagunta, Pradeep K.
Roberts, John H.
Corkindale, David
Journal name Marketing Science
Volume number 39
Issue number 1
Start page 234
End page 252
Total pages 19
Publisher Informs
Place of publication Catonsville, MD
Publication date 2020-01
ISSN 0732-2399
1526-548X
Keyword(s) cigarette smoking
plain packaging
difference in differences
error correction models
Social Sciences
Business
Business & Economics
UNIT-ROOT
TOBACCO CONSUMPTION
TIME-SERIES
PRICE
SMOKING
MODEL
MANAGEMENT
DEMAND
IMAGE
EAT
Summary We assess the impact of legislation mandating the plain packaging of cigarettes in 2012 in Australia on both primary and secondary demand. We first examine the causal impact of the legislation at the cigarette category level by comparing the changes in sales before and after legislation with the corresponding changes in sales in a comparable market, New Zealand, where the plain packaging mandate (PPM) was not imposed. Our results suggest a decline in sales due to the PPM of around 67 million units (sticks) per month, representing around 7.5% of the market. Our results on the mechanism using brand-level sales data from Australia suggest reduced differentiation after the PPM, with higher price sensitivity. Premium and mainstream brands’ price sensitivities are most affected after the PPM, but we also find channel-specific differences, with grocery (convenience) channels showing an increase (a decline) in post-PPM short-term price sensitivity. Because the government has some control over price through excise taxes, understanding changes in price sensitivities provides guidance to health authorities on the relative impacts of price-and non-price-related policy on cigarettes sales. We also explore other public policy implications of our results, such as the expected reduction in sales per month we might see in New Zealand due to their instituting a PPM.
Language eng
DOI 10.1287/mksc.2019.1164
Indigenous content off
Field of Research 1505 Marketing
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2019, The Author(s)
Free to Read? Yes
Use Rights Creative Commons Attribution licence
Persistent URL http://hdl.handle.net/10536/DRO/DU:30135482

Document type: Journal Article
Collections: Faculty of Business and Law
Open Access Collection
Department of Marketing
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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.