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Grant Details

Grant Number: 5R01CA120338-04 Interpret this number
Primary Investigator: Lillard, Dean
Organization: Cornell University
Project Title: Strategic Targeting of Price Discounts for Cigarettes: Firm and Consumer Behavior
Fiscal Year: 2010
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Abstract

DESCRIPTION (provided by applicant): We propose to investigate the relationship between price discount coupons and smoking behavior. Previous studies have largely ignored variation in cigarette prices across brands. We will examine how cigarette manufacturers offer price discount coupons to attract new smokers, discourage smokers from quitting, and to encourage brand switching. We also study how smoking cessation product manufacturers target coupons to encourage quitting. Study 1 will use geographic specific data on price discount coupons to examine how coupon offers vary with market conditions. We will examine H1 and H2: cigarette manufacturers are more likely to offer price discounts in markets immediately after the cigarette tax is raised (when unemployment increases); H3: Manufacturers will offer fewer cessation price discounts immediately after the cigarette tax is raised, and H4: Cessation manufacturers will offer more discounts when unemployment has increased. In Study 2 we investigate individual smoking behavior. We test H5: A person is more likely to buy tobacco with coupons when he is offered more cigarette coupons, and H6: a person is less likely to buy tobacco with coupons when he is offered more cessation product coupons. We will also test H7: A person is more likely to be a current smoker if he is offered (more) cigarette coupons; H8: A smoker is more likely to have recently tried to quit if he was offered (more) smoking cessation product coupons; H9: a smoker is less likely to successfully quit if he is offered (more) cigarette coupons; H10: a smoker is more likely to successfully quit if he is offered more smoking cessation product coupons; and H11: A smoker is more likely to switch to lower priced brands than he is to quit smoking or continue smoking the same brand if he is offered more cigarette coupons; and H12: A smoker is more likely to quit than he is to switch to lower priced brands or continue smoking the same brand if he is offered more smoking cessation coupons. In Study 3 we test H13: "pay to switch" discounting should be more often targeted at younger (less committed) rather than older (more committed) smokers; and H14: Manufacturers will be more likely to offer (bigger) price discounts for brands that are not "premium" brands in markets (magazines) with more mature smokers. In Study 4 we test whether targeting strategies vary significantly within a geographic market area. Specifically we test hypotheses H15 and H16 that are the in-store counterpart of hypotheses H13 and H14 noted above.

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Publications

Just passing through: the effect of the Master Settlement Agreement on estimated cigarette tax price pass-through.
Authors: Lillard DR, Sfekas A
Source: Appl Econ Lett, 2013;20(4), p. 353-357.
PMID: 24465153
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Smoking initiation and the iron law of demand.
Authors: Lillard DR, Molloy E, Sfekas A
Source: J Health Econ, 2013 Jan;32(1), p. 114-27.
EPub date: 2012 Sep 13.
PMID: 23220458
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Accounting for heaping in retrospectively reported event data - a mixture-model approach.
Authors: Bar HY, Lillard DR
Source: Stat Med, 2012 Nov 30;31(27), p. 3347-65.
EPub date: 2012 Jun 25.
PMID: 22733577
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