RISK BELIEFS AND SMOKING BEHAVIOR

I. INTRODUCTION More people die from smoking each year than from any other consumption activity. These risks arise from consumer choices in a market context. As a result, whether consumers are cognizant of the attendant hazards is a central concern in assessing whether there is a market failure and the extent of such a failure. Influencing people's risk beliefs has been a primary focus of many government interventions in this market, including warnings requirements and public information campaigns. Public opinion poll data provide some insight into general trends in smoking risk beliefs but do little to resolve the more fundamental concern of whether people underestimate the risks posed by cigarettes. Typical questions ask respondents if cigarette smoking is "one of the causes of lung cancer" or whether smoking is "harmful." (1) These general measures of risk awareness provide a useful historical perspective on smoking risk beliefs but do not make it possible to determine whether the public perceives the risk accurately. Recognizing that smoking is harmful does not imply that the perceived risk level is as great as the actual risk. The first exploration of the adequacy of risk beliefs was in Viscusi (1990, 1992), which examined the adequacy of lung cancer risk beliefs using a quantitative risk question. (2) The 1985 national survey used in these studies asked respondents how many smokers out of 100 would get lung cancer because they smoke. People generally overestimate the risks of getting lung cancer due to smoking. These risk beliefs in turn affect the decision to smoke in the expected manner. At least for this risk component, which has been the most prominent smoking risk since the 1964 Surgeon General report linking smoking and lung cancer, the empirical evidence does not indicate a market failure. Notwithstanding these results, a variety of puzzles remain. Do smokers also perceive the other hazards of cigarettes, such as the total mortality risk of smoking? If they understand the risk of death, do they also properly assess how much life expectancy will be lost due to their premature mortality? Even if there is such a general understanding on average for the population, are there major pockets of ignorance? The difference between the smoking and the nonsmoking populations is striking. The current U.S. smoking population is less well educated and has lower income levels than the non-smoking population. A possible explanation for this difference is that the higher education levels of nonsmokers enable them to obtain a better understanding of the hazards of smoking, leading to lower smoking rates among the better educated. Such differences in risk beliefs have never been analyzed previously due to the absence of smoking risk belief surveys that include such demographic information. In this article, we exploit the more refined capabilities of two large data sets: a 1997 national survey of smoking risk beliefs and a 1998 survey undertaken in Massachusetts. Each of these surveys includes several quantitative risk perception measures as well as much more comprehensive data on background characteristics than in the 1985 survey analyzed in Viscusi (1990, 1992). In Section II, we introduce the survey data and provide an overview of smoking risk beliefs. Irrespective of the risk measure, there is a pronounced tendency to overestimate the risk level compared to objective scientific measures of the risk. These results contrast with the frequently expressed claim in the literature that cigarette smokers are the victims of companies' advertising. (3) According to this alternative view, companies have allegedly designed their advertising strategies to exploit potential irrationalities in order to foster higher rates of smoking. Section III explores the determinants of these risk beliefs, yielding some intriguing results. Better educated respondents do have more accurate beliefs, but because people generally overestimate the risks of smoking, the greater accuracy is reflected in a lower assessment of the risks. …