June 2019

IZA DP No. 12400: How Effective Are Pictorial Warnings on Tobacco Products? New Evidence on Smoking Behaviour Using Australian Panel Data

forthcoming in: Journal of Health Economics

Studies examining the introduction of pictorial warnings on cigarette packages provide inconclusive evidence due to small samples and methodological issues. We use individual-level panel data from Australia to examine the association between pictorial warnings and smoking behaviour - prevalence, quitting, initiating and relapsing. The pictorial warnings were accompanied by a reference to a smoking cessation helpline and supportive television commercials. Applying an event study framework, we show that the reform reduced smoking rates by around 4% within the first year of the policy. The effect decreases with age, is similar for men and women, and is slightly larger for low-educated compared to high-educated individuals. The reform permanently lowered smoking rates primarily due to increased quitting in the year of the reform. Thus, pictorial warnings combined with a reference to a smoking cessation helpline and supportive media campaigns are an important tobacco control measure to reduce the social costs of smoking.