Shock and awe or incentive-compatible harm reduction? Graphic health warnings on tobacco packages

Graphic Health Warnings (GHWs) on cigarette packages were first introduced in Canada in 2001 and will become mandatory in the US as of January 2022. While previous studies have evaluated the impacts of GHWs, the data used in these studies have several shortcomings. The objective of this paper was to investigate the likely impact of such warnings in the US based upon the experience of Canada using hitherto unexplored monthly cigarette sales data, and to explore if alternative approaches involving risk-reduced products might be more successful in reducing smoking.

We used quasi-experimental segmented regression and difference-in-differences analyses. Data on monthly sales (i.e., shipments) of cigarettes from Canadian manufacturers to Canadian retailers during 1995-2005 were obtained from Statistics Canada.

We found that GHWs did not have a significant impact on the sales of cigarettes in Canada. We propose an alternative type of graphical health messaging that actively combines information on how to quit with the legally required messaging. The novelty of the proposal is that it is incentive compatible for the supply side of the market and if adopted in several states, the measure could be tested by using a suitable treatment-control design.

Our findings imply that we should not expect any notable decline in sales or consumption as a result of implementation of GHWs in the US. The main impact of GHWs will be to add to the anti-smoking culture that has grown steadily over several decades, and this may impact smoking in the longer term.