Journal Article Incentive Pricing and Utility Regulation: A Comment Get access Bruce L. Jaffee Bruce L. Jaffee Indiana University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 86, Issue 1, February 1972, Pages 143–144, https://doi.org/10.2307/1880501 Published: 01 February 1972

Journal Article Economics of Information and Job Search: Another View Get access Richard L. Peterson Richard L. Peterson Southern Methodist University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 86, Issue 1, February 1972, Pages 127–131, https://doi.org/10.2307/1880497 Published: 01 February 1972

I. Introduction, 545. — II. The airframe industry, 546. — III. Separation of the industry, 550. — IV. Estimated relationships between profits and contracts, 552. — V. Imputation of profits, 556. — VI. Conclusions, 560. — Appendix, 561.

I. Lindbeck's analysis of the New Left, 632. — II. Some additional observations, 637.

IN this paper I have esitimated the amount United States cigarette consumption has been affected by cigarette advertising and by the health scare over smoking. During 19531970 the health scare depressed cigarette consumption considerably more than cigarette advertising boosted it. Section I presents econometric estimations of the demand function for cigarettes, incorporating econometric corrections for multicollinearity. Section II gauges the comparative effects of advertising and the health scare. On these results, section III evaluates whether the recent Congressional ban of broadcast advertising of cigarettes will promote public health by reducing cigarette consumption. Although the advertising elasticity of demand was positive, it was quite small. More importantly, however, the ban also eliminated the health-scare-oriented antismoking commercials, which the Federal Communications Commission had forced broadcasters to air in proportion to cigarette commercials. Since the health scare has been the relatively stronger influence, the net effect of the ban may be to increase consumption, not decrease it. Ban advocates disregarded the interconnection of cigarette and antismoking commercials; the United States cigarette manufacturers apparently were not confused about the interconnection. Finally, the probable anti-competitive effects of the ban are noted in section IV.

Center of Indiana University, to whom I would like to express my appreciation.' For instance, in an introduction to a presenitation of French concentration ratios, Jacques Loup ("La concentration dans l'industrie francaise," E~tztdes et con joncture, XXIV (Feb. 1969) expressly notes that the United States concentration ratios are lover but does not bother to carry out any actual empirical comparisons Nwhich vould, in point of fact, show the reverse conclusion (see table 2 ).2This point was emphasized to me in cori-espondence by Peter Pashigian; for a detailed analysis of certain other critical aspects of the relationships between market size and monopoly, see his "The Effect of Market Size on Concentration,"

Robert A. Haugen, James L. Pappas, Equilibrium in the Pricing of Capital Assets, Risk-Bearing Debt Instruments, and the Question of Optimal Capital Structure: A Reply, The Journal of Financial and Quantitative Analysis, Vol. 7, No. 4 (Sep., 1972), pp. 2005-2008