Estimating the impact of pictorial health warnings and “plain” cigarette packaging: Evidence from experimental auctions among adult smokers in the United States

Abstract

Objective

To estimate differences in demand for cigarette packages with different packaging and health warning label formats.

Methods

Adult smokers (n = 404) in four states participated in experimental auctions. Participants bid on two of four experimental conditions, each involving a different health warning label format but with the same warning message: (1) text on 50% of pack side; (2) text on 50% of the pack front and back; (3) text with a graphic picture on 50% of the pack front and back; and (4) same as previous format, but without brand imagery.

Results

Mean bids decreased across conditions (1: $3.52; 2: $3.43; 3: $3.11; 4: $2.93). Bivariate and multivariate random effects models indicated that there was no statistically significant difference in demand for packs with either of the two text only warnings; however, demand was significantly lower for both packs with prominent pictorial warnings, with the lowest demand associated with the plain, unbranded pack.

Conclusions

Results suggest that prominent health warnings with graphic pictures will reduce demand for cigarettes. Regulators should not only consider this type of warning label, but also plain packaging policies for tobacco products.

Introduction

The 2009 Family Smoking Prevention and Tobacco Control Act gave the United States’ Food and Drug Administration (FDA) regulatory authority over the cigarette package health warning labels (HWLs), as well as over marketing and packaging that mislead consumers about the safety of tobacco products [1], [2]. Current US HWL policy has been in force since 1984 and involves four rotating messages that appear on approximately 50% of the side of the cigarette pack. The new warnings, which are scheduled to appear by October 2012, will include eight messages accompanied by pictures that will appear on 50% of both the front and back of cigarette packages (see Table 1). This policy is consistent with recommended standards for the World Health Organization's Framework Convention on Tobacco Control (WHO-FCTC) [3], [4]. Furthermore, it builds upon the evidence base indicating that prominent HWLs that combine pictures and text are more effective than text-only messages in engaging smokers, increasing knowledge about risks, promoting thoughts about quitting, and decreasing demand for cigarettes [5], [6], [7], [8], [9], [10], [11], [12], [13].

Studies mainly conducted outside of the US find that pictorial HWLs that show gruesome, diseased organs or human suffering due to smoking appear to have a greater impact on smokers than more abstract imagery [14], [15], [16], [17], [18], [19]. Furthermore, such imagery may have its greatest impact among populations with lower educational attainment [13]. Indeed, other research indicates that emotionally evocative ads and testimonials work better among lower than higher SES groups [20]. Similar to the greater price sensitivity found among low-income smokers [21], pictorial HWLs could help remediate the disparate concentration of smoking within socially disadvantaged groups [22].

In addition to calls for pictorial HWLs, researchers and advocates increasingly call for tobacco products to come in “plain” packages, which would eliminate color and brand imagery [23], [24]. The rationale for plain, unbranded packaging includes studies showing that false beliefs about the reduced risks associated with different brand varieties persist, in spite of the removal of deceitful brand descriptors, like light or mild [25]. Indeed, the persistence of false beliefs may be due to brand imagery and color [26], [27], as indicated in tobacco industry documents from Philip Morris: “as one moves down the delivery sector, then the closer to white a pack tends to become. This is because white is generally held to convey a clean healthy association.”[28]. Aside from reducing false health beliefs, plain, unbranded packaging appears to increase the noticeability, recall and believability of health warnings [29], [30] and to reduce brand appeal among both adults [31] and youth [32], [33], [34]. We hypothesize that smokers will have a lower demand for plain, unbranded cigarettes then for the same cigarettes in branded packaging.

In this study, we used the experimental economics method of auctions [35] among adult smokers in four US cities in order to estimate differences in demand associated with different health warning label formats and plain, unbranded packaging. Experimental auction participants actually purchase any products they win. Because of the immediate monetary consequences, experimental auctions may be preferable to hypothetical valuation techniques such as hypothetical choice experiments [36] or hypothetical auctions [37]. A metaanalysis comparing real and hypothetical valuations finds that hypothetical valuations exceed real valuation by a factor of three on average [38].