Drug+Store+Tobacco+Bans+Gain+Traction-+Wendy+Leung

Article Name: Drug Store Tobacco Bans Gain Traction Source: [] Date:April 24th 2011

Summary: This article states that Massachusetts cities and towns are banning tobaccos in pharmacies. The pace of this banning tobacco sales around the cities and towns are increasing, ever since 2009, by having four bans this year already. Tobacco is a harmful good that the market and the society relies too much onto, not only does it create side affects and serious bad health for the one consumed by also for the people around them. This article gives an idea that the over supply of the demerit good is has decreased due to government's intervention in "tobaccos market in Massachusetts". Currently 126 pharmacies locations are banned to sell tobaccos and the number will continue to accelerate. But this decisions and the action to the banning tobacco around the cities created many debates since there are a minority against it.

Vocabulary: Negative Externality of Consumption: It is when one good or services being consumed by individuals, also affects the third party. Demerit Good:Goods that government considers bad for both people who consume and the society as a whole. Therefore, government wants to see the consumed to a smaller degree.

Analysis Smoking creates bad damage and reputation for the smoker and also second hand smoke for the people surrounding him or her. It can be anyone in the "third party" that is being affected. This is a typical example of the government's intervention to the over supply of demerit goods. The demerit goods are goods that will be overprovided by the market and are over consumed. These goods are not good for the people and the society as a whole. And right now government tries to force the market to consume at a lesser degree by banning tobaccos in pharmacies. It is not the only method but this method will improve the situation of over supply of the demerit goods. But this can also create some harm because when government bans a demerit good, it can also increase the sells of illegal black market to such product. These producers who are running the illegal markets wants to make more profit by fulfilling the existing demand though government bans it. Secondly the banning of tobacco around Massachusetts is also a example of the negative externalities of consumption. Because tobacco is a good that when being consumed by the consumer it harms the third party too. Consumers that smoke and enjoy the private benefits will create external cost for people around him or her (second hand smoking). At the level where MSC equals to MSB the consumers maximize their own utility level and they will ignore the externality created. The consumers are over consuming tobacco at Q1. The over consumption is from Q* to Q1. There is welfare loss to society and this leads to the market failure.

But this article stated the "banning action" taken place in Massachusetts. This means that government already taken action to eliminate the negative externality create. Currently the government banned the sales of tobacco at 126 pharmacies location. This means that it decreased the supply of tobacco around there community. Because it is a government action, people must follow. There fore, the supply decreased and the demand for tobacco will slowly decrease also.

Graph: Evaluation: Thought the government have already taken action but I think they should apply other methods of banning tobacco at the same time. Firstly, the government can just directly ban tobacco from all the pharmacies and at the same time give education to schoools and hold public lectures about the negativeness of smoking. By doing so I think people will realize how important it is and to also decrease the amount of smokers in the future. But I think another way would be for the government to add tax to every single tobacco and tobacco related problem. By doing so, price increased. Even though smoking can maximize the private utility level of a smoker but when the "want" costs too much than the demand will slowly decrease. But there are risks to this problem. With this ban, smokers will go seek for illegal black markets that can provide them tobacco. So government should take action in preventing the problem by adding tax and also be cautious to the black market.

In general I still think that the method isn't as effective. Even though it is not being sold at more than hundreds of pharmacies but there are still many place people can buy and consume and create negative externality. This is a a serious over supply of a demerit good causing negative externality of consumption so government should take action quick!