Friday, 21 February 2020

A poor advertisement for government intervention

The Health Foundation has a blog post up by Adam Briggs, a 'public health doctor' who campaigned for the sugar levy and did the modelling which claimed the sugar levy would work (he was then, inevitably, hired to evaluate the sugar levy). Briggs says that market failures can potentially justify government intervention in smoking, drinking, diet and so on.

Indeed they can - this is the main theme of Killjoys - but he doesn't look at what the net externalities are or what the optimal level of consumption is. It is not even clear that he understands what an externality is (at one point he talks about 'negative externalities borne by the individual').

The only reason I mention it is that he uses the graph below to illustrate his point that...

As the government began to take action, smoking rates have fallen since the 1970s, declining from 46% in 1974, to 17% in 2018.

Government action has surely had some effect on the smoking rate over the last fifty years, but this graph does a terrible job of proving it. In the period between 1974 and 1993 there was almost nothing in the way of legislation: the 1975 advertising code for alcohol and tobacco was trivial, as were the new health warnings. And surely no one believes that banning smoking on the London Underground had an impact on the national smoking rate.

And yet smoking prevalence fell throughout this twenty year period, largely thanks to public information campaigns. Education is an intervention of a sort, but it's much softer than what Briggs is proposing.

The tobacco duty escalator began in 1993 and was increased in 1998. Despite prices shooting up, the smoking rate flattened out between 1993 and 2001 when the scale of tobacco smuggling led the escalator to be scrapped.

From 2001, tobacco duty only rose in line with inflation, which is to say it didn't rise. Did the smoking rate shoot up as a result? On the contrary, it finally started falling again and it continued to fall until the next big anti-smoking idea - the smoking ban - was introduced.

The smoking ban heralded another era when smoking rates barely budged. Despite graphic warnings being introduced in 2008 and the tobacco escalator being reintroduced in 2010 (wrongly marked as 2012 in the graph), smoking prevalence showed no sign of dropping until 2013 when e-cigarettes went mainstream. The graph doesn't mention e-cigarettes.

So this graph doesn't really tell the story it thinks it does, does it?

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