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Health Economics: Plain Packaging of Cigarettes - Essay Example

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In the paper “Health Economics: Plain Packaging of Cigarettes” the author analyses attempts of several counties to reduce the number of smokers. The plain packaging of cigarettes is another attempt to reduce the number of smokers…
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Health Economics: Plain Packaging of Cigarettes
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Health Economics: Plain Packaging of Cigarettes

Download file to see previous pages... The packaging should be done with a plain brown cover with the name of the brand printed in a uniform style in a predetermined size. Thus there is very little flexibility on part of the companies in presenting the products to the end users. Along with that the packs also contain mandated information about the ill effects of the product and the legal disclosures like the tax stamps.
This concept of plain packaging had been proposed in countries like New Zealand, Canada and Australia since the end of 1980s (Voon, Mitchell, and Liberman, 2012, p. 12). These attempts were taken with the main motive of reducing the amount of consumption of tobacco in the countries. There have been various researches done during these years to determine the outcome of the introduction of plain packaging of tobacco products. Australia being the pioneer of this concept was the first country to introduce the concept (Shanahan and Elliott, 2009, p. 182).
The removal of the branding removes the attractiveness of the product and therefore discourages the smokers to consume the product. Thus the removal of branding has an effect that a taxation of product would have on the product.
For any normal good, the change in the price of the product will have an effect on the quantity of the product consumed. When the prices increase people would consume less of that product. This is however not true in case of products which are addictive in nature. Even through the prices increase the quantity of the products consumed would not decrease. Thus the price elasticity of demand for the products would be zero.
The economics of the plain packaging has been explained with the help of the following graphs. ...Download file to see next pagesRead More
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