No More Youth Advertising? The Reaction of the Tobacco Companies to the Master Settlement Agreement

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The United States has a long history of regulating tobacco industry advertising. One such restriction was the 1998 Master Settlement Agreement (MSA). The MSA had three main components: (1) a tax-like increase in cigarette prices, (2) the publication of tobacco industry documents and (3) advertising restrictions. The advertising restrictions are the main focus of this study and include, among other restrictions, the elimination of “youth targeted” advertisements, cartoon advertisements (such as Joe Camel), and outdoor advertisements.. These rulings had large ramifications on the tobacco industry but not all companies reacted in the same manner. This study sought to determine how the MSA affected the number of tobacco advertisements in all magazines as well as only in magazines with high youth-exposure. Additionally, it compared the reactions of Philip Morris and RJ Reynolds to the MSA in relation to each of the aforementioned subsets of advertisements. As predicted, after the MSA the number of advertisements increased in the short term but, concurrently, in the long run the rate at which advertisements were placed decreased. Additionally, Philip Morris followed the above trend but RJ Reynolds reacted in a radically differently manner; in such that they decreased their advertisements in the short run but decreased the rate at which their number of advertisements fell in the long term. Overall, this study confirms previous findings that the MSA led to major changes in the manner in which s the cigarette industry advertised, and that the two largest cigarette manufacturers reacted differently to the new regulations.

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Master Settlement Agreement; Philip Morris; RJ Reynolds; Smoking


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