Economic Impact Analysis

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Studying the effects of social, mental and emotional factors on the purchasing decisions of tobacco users, this research project will use behavioral economics methodologies to produce new data for policy decision-making. Led by Principal Investigator Frank J. Chaloupka, Distinguished Professor of Economics at the University of Illinois at Chicago, “Enhancing the Economic Impact Analysis used in FDA’s Rules for Tobacco Products” aims to produce new evidence – data that will inform and refine the FDA’s economic impact assessments of future proposed tobacco control rules.

The project will utilize a combination of behavioral economics experiments using original data collection, acquiring existing archival, survey, and commercial databases, and merging data analyses. Economic factors, such as price and promotions, will be among many factors considered which may influence individuals’ decisions related to tobacco products. A variety of methodologies will be studied to address the FDA’s research priorities of understanding the role of economics and policies on tobacco use and perceptions.

The project’s goals include:

• the assessment of the impact on tobacco use of FDA regulatory actions and other tobacco control policies, such as graphic health warnings, point-of-sale marketing restrictions, flavor bans and pack size restrictions. This assessment will differentiate both among multiple demographics and between traditional and emerging tobacco products.

• the assessment of the impact on tobacco use of FDA regulatory actions and other tobacco control policies related to consumer surplus (enjoyment) obtained by tobacco users. Behavioral economics experiments will quantify the extent of multiple biases and the time inconsistencies in decisions related to tobacco use.

• the extension of the range of costs and benefits included in assessing the economic impact of FDA regulatory actions. That increased range would include a broader set of health and economics benefits than those included in previous FDA assessments. Examples could include the benefits related to reductions in both secondhand smoke exposure and maternal smoking during and after pregnancy.


Jidong Huang, PhD, Research Scientist, UIC
Matthew R. Levy, PhD, Lecturer in Economics, London School of Economics
Richard Peck, PhD, Associate Professor, UIC
John A. Tauras, PhD, Associate Professor, UIC
Justin S. White, PhD, Assistant Professor, UCSF