Estimating the 'consumer surplus' for branded versus standardised tobacco packaging

Area of Science:

• Public Health
• Tobacco Control
• Behavioral Economics

Background:

• Tobacco companies dispute the behavioral impact of standardised packaging.
• This study quantifies standardised packaging's effect by comparing it to excise tax-driven price increases.

Purpose of the Study:

• To estimate the behavioral impact of standardised tobacco packaging compared to price increases.
• To provide a quantitative measure of standardised packaging's likely effect on adult smokers.

Main Methods:

• An online study of 311 adult New Zealand smokers.
• Willingness-to-pay task comparing branded and standardised packs at various price points.
• Choice experiment with branded vs. standardised packs, varying warning labels and prices.

Main Results:

• Smokers showed higher purchase likelihood for branded packs, even with smaller warnings.
• Adult smokers were willing to pay approximately 5% more for branded packs.
• Consumer surplus estimates were similar between willingness-to-pay and choice experiments, but varied by warning theme and demographics.

Conclusions:

• Standardised packaging with larger warning labels could impact adult smokers similarly to a 5% tobacco price increase.
• Findings support the efficacy of standardised packaging for adult smokers, beyond its primary goal of reducing youth initiation.
• This tobacco control measure offers notable benefits for adult smokers.