Essay on Banning Cigarettes

Readers Question: Using data and your economic knowledge assess the case for and against a government completely banning the sale and consumption of cigarettes. AQA (15)

1. Cigarettes are a demerit good. People underestimate the costs of smoking, e.g. lower life expectancy It has been suggested that the true cost of a packet of cigarettes is over $200. Therefore, the government is justified to try and stop people consuming goods which harm them.

2. Cigarettes have negative externalities on the rest of society. For example, it creates health problems of passive smoking. This leads to over consumption and is another justification for banning smoking.

3. In the data it suggests that increasing tax on cigarettes by 200% has only caused a 8.3 % fall in demand. Therefore,  it suggests taxing is ineffective and therefore the government should consider banning it completely.

Problems of Banning Cigarette Sales and Consumption

1. It would encourage the black market. People are addicted so they would find a way to keep smoking. This would encourage criminal activity which the government would need to try and police. The potential profits for criminals would be very high.

2. The government would lose all tax revenue. This amounts to over £7 billion. It would require other taxes to be increased.

3. It would cause unemployment amongst cigarette companies. However, South Korea is suggesting to bring the complete ban after 10 years. This gives people the chance to change their habits.
See also:

• Should Taxes on Cigarettes be Increased?