Study finds that graphic cigarette package warning labels significantly reduce demand.

FDA policy mandates that in September of 2012 tobacco companies cover half of one side of cigarette pack with nine new cigarette warning labels including extremely graphic images of lung and mouth cancer.

In the study 404 adult smokers participated in an experimental auction on cigarette packs with four different kinds of warning labels. All packages had the same message "smoking causes mouth cancer."

The first cigarette pack had text-only FDA warning message on the side of the pack, second pack had FDA text-only warning that covered half of the lower front/back side of the pack. A third warning had same text message, but with a photo depicting mouth cancer. The fourth package had the same text and graphic photo, but was plain with all symbolic brand and elements removed except for brand's font and size.

"We found that the label with just the front text warning had little effect on consumers," says study co-author Matthew Rousu, professor of economics at Susquehanna University in Selinsgrove, Pa. "However, demand was significantly lower for packs with grotesque images, with the lowest demand associated with the plain, unbranded pack."

In the study the auction bids for cigarette packs that had a photo of mouth cancer and no bran imagery received bids that were 17 percent lower than the bids with FDA text warning labels.

"Results from our study suggest that the new health warnings with graphic pictures will reduce demand for cigarettes," says Rousu, who conducted the study with James F. Thrasher, David Hammond, Ashley Navarro and Jay R. Corrigan.

The authors point out that what their study can't address is how the new labels will affect non-smokers.

The study, "Estimating the impact of pictorial health warnings and 'plain' cigarette packaging: Evidence form experimental auctions among adult smokers in the United States," appears in the September 2011 issue of the journal Health Policy.