The Trade and Health Effects of Tobacco Regulations

Abstract

We examine how cross-country differences in tobacco regulations affect tobacco imports and consumer health. We find that tobacco imports increase when a rich exporter's tobacco regulations are stringent relative to the regulations of its poor importing trade partner. The main policy driver may be differences in marketing and counter-advertising tobacco regulations between trading partners. If a rich exporting country adopts counter-advertising tobacco regulations, mortality and morbidity from tobacco-related diseases in the poor importing country increase by four and eighty smokers per million people annually, respectively. Our results highlight the importance of accounting for spillovers in an increasingly multilateral economy.

Keywords

• bilateral trade effects
• gravity model
• mortality
• tobacco regulation