The Diminishing Returns to Tobacco Legislation "Reader's notes" Exercise 5-3

Points in the debate have merit:

-        The actions taken by the governments to reduce tobacco consumption.

-        Illustration the phenomenon of diminishing returns.

-        Numbers given showing the success in reducing tobacco consumption in the last ten years.

-        Giving reasons for decreasing returns to government intervention.

Points lessen the debate:

-        The debate does not include any reports or suggestions of any health care organizations to reduce tobacco consumption.

-         Did not concentrate on the roll of media in the awareness of smoking risks, in addition to the government roll, but instead they argue that “Too much information may also kill information“ , I’m not quite sure how far is this statement accurate!

The point of diminishing returns for the government

In my opinion, the point of diminishing returns for the government is indeterminate, although we can say that the government will reach the diminishing returns when it increase the factors which may lead to reduce the tobacco consumption, so by September 2002 where the last action were taken by the government which was to force the manufacturers to print on cigarette packs the effect of tobacco related diseases may be the point of the diminishing returns for the government afterward.\

The government may fund some activities which can increase the awareness using media campaigns, also it may create some ideas in this concern to be processed by some NGO’s or some organizations or educational institutes, like arranging a marathon to the smokers to be sponsored by the manufacturers of the cigarettes and it’s income may be devoted to researches related to the dangers of smoking and its relationship to cancer diseases.   

The debate include some information regarding the supply and demand of tobacco products, in 1985-1995, the supply increase mainly because of taxes and the demand decreased by 18%, while in the later period (1995-1999) we can see the supply increase more while the percentage of the demand decreased only by 11 percent.

As the cigarette have a very inelastic demand, we can see that the debate suggest that the government should increase the taxes “Sin taxes” to achieve the same results achieved in the earlier period.