A STUDY MEASURING THE INFLUENCE OF ADVERTISING ON CIGARETTE CONSUMPTION: ESTIMATION WITH OLS MODEL

This study investigates the effects of advertising on cigarette consumption, particularly after 1967. Sources of data include the statistical abstract of the U.S., the Historical Statistics of the U.S., and the Vital Statistics between 1955 and 1979. A multiple regression model was used to analyze the data. Cigarette consumption was considered a dependent variable. Disposable income, death rate due to cancer of the respiratory system/total cancer death, advertising outlays for cigarettes: Newspaper and television advertisinp/total advertising cost, cigarette production (including long and regular sizes), sales outlets, lag variable, average price for cigarettes, and a dummy variable were considered independent variables. Analysis reveal eel., on the one hand, a significant negative relationship between cigarette consumption and total cancer death and average prices and, on the other, a significant positive relationship between loyalty and cigarette consumntion. Although advertising expenditures were not found to be statistically significant, increased spending on advertising was found to have an increasing effect on cigarette consumption.