DOES ADVERTISING MATTER? ESTIMATING THE IMPACT OF CIGARETTE ADVERTISING ON SMOKING AMONG YOUTH IN DEVELOPING COUNTRIES

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Abstract

The goal of this paper is to evaluate the impact of cigarette advertising on smoking among youth in developing countries. Using micro-level data from 19 developing countries, we examine the structural relationship between smoking behavior and advertising exposure and the reduced-form relationship between smoking and advertising bans. Instrumental variables are used to address the endogeneity of advertising exposure. Country-specific unobserved heterogeneity is further reduced by controlling for measures of antismoking sentiment and cigarette prices. After accounting for the endogeneity of advertising, we find that the positive correlation between smoking and advertising exposure in our sample can be largely explained by the disproportionately higher propensity of smokers to observe advertising rather than a direct causal effect of advertising on smoking. (JEL I12, I18)

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