Smoking Case
Smoking is bad for our health and it may caused many diseases such as lung cancer, heart disease and so on. However, one months ago, the government announced the price floor for all of the cigarette brands is RM 7 and only 20 sticks per pack. The anti-tobacco groups feel that the government has to stay on with the campaign with more rigid measures. Yet, Dr. Molly Cheah who is the chairman of Malaysian Council for Tobacco Control stated that price control is not the best way to let the smokers quit from smoking. This is because of the price of cigarettes is expensive to the poor people but rich people still able to buy the cigarettes. Besides, she also mentioned that the cigarette packs plain packaging is one of the ways to deter smoking. Based on the article, the smokers in Malaysia had increase and also affected the trend of teenagers.
In my opinion, I think the price floor of cigarette which is a minimum of RM7.00 per pack will not reduce the number of smokers. This is because since the year of 2010, the price floor for cigarettes is already RM 7.00 per pack. However, the number of smokers is still keep on increasing. The purpose for the government to impose the price floor for cigarettes is to reduce the number of buyers in cigarettes, but, when the government imposed the price floor for cigarettes, the suppliers of cigarettes are happy with it because although the price floor for cigarettes is quite high for some of the buyers, the consumers will not stop to smoke because they still can afford the price floor for cigarettes. Therefore, when the level of consumption is still maintain and the price floor for cigarettes is high, the sellers are still making profit. In this situation, not only the number of buyers will not decrease, yet, the number of sellers for cigarettes will keep on increasing. According to Gruber and Zinman, in the smoking decision, teenagers are more focusing on the price of cigarettes. However, they predict that every 10% decrease