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Health information drives crucial consumer health decisions and plays a central role in healthcare markets. Consumers who are better-informed about smoking, diet, and physical activity make healthier choices outside the healthcare sector (Kenkel, 1991; Ippolito & Mathios, 1990, 1995; Meara, 2001). Better-informed consumers also interact differently with physicians and other healthcare providers (e.g., Cutler, Landrum, & Stewart, 2006). In addition to the immediate consequences for individual consumers, health economists have long recognized that information also has broader implications for principal–agent relationships and the functioning of healthcare markets.¹ More recent lines of research in health economics and medical sociology emphasize the potential role of consumer information in explaining health disparities associated with socioeconomic status (Deaton, 2002; Goldman & Lakdawalla, 2001; Glied & Lleras-Muney, 2003; Link & Phelan, 1995). Both health economists and medical sociologists stress that because of disparities in consumer information, rapid medical progress tends to be accompanied by increased disparities in medical treatment and health outcomes.

In recent policy discussions, the conventional wisdom is that adolescent smoking is substantially more tax- or price-responsive than adult smoking.¹ In a previous study, we used data from the first three waves of the National Education Longitudinal Study (NELS) to estimate the impact of taxes and prices on smoking initiation during adolescence (DeCicca, Kenkel, & Mathios, 2002). Contrary to the conventional wisdom, we found weak or non-existent tax/price effects in our models of the onset of adolescent smoking between 1988 and 1992. In this study, we use data from the 2000 wave of NELS, when most respondents were about 26 years old. Although cigarette prices increased by almost 40% in real terms between 1992 and 2000, smoking prevalence among the NELS respondents also increased from 18% to 23%, about the same increase observed in other cohorts over these ages.

Six papers on individual behaviour are included in this volume. The first three are devoted to the determinants of individual consumption behaviour, the next two analyse the impact of individual substance use on labour market performance and criminal activities, respectively, while the last one challenges recent research, which claims that the increase in the prescription of antidepressants is the major factor behind the observed reduction in suicide rates during the 1990s.

Kevin Fiscella notes that, to date, progress in eliminating racial disparities has been slow. He calls for a comprehensive approach that goes beyond the narrow focus of current policy. Given the association between education and health, he advocates greater investments in early childhood education. In light of its broad geographic and demographic reach and role in preventing or delaying the onset of chronic disease, he also proposes to strengthen the delivery of primary care through the network of Federally Qualified Community Health Centers (FQHCs).

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

In a number of recent multi-billion dollar cases brought against cigarette manufacturers, plaintiffs have in part alleged that the cigarette manufacturers (1) conspired not to compete on the basis of health claims or the introduction of potentially safer cigarettes since the 1950s, and (2) engaged in fraudulent advertising by making implied health claims in advertisements selling ‘low tar’/‘light’ cigarettes. In this type of litigation, defendants’ actions could be due to alleged illegal behaviour as asserted by plaintiffs, or be the result of market forces that may have nothing to do with allegedly inappropriate acts. We examine the economic evidence relating to these allegations, taking into account some of the major influences on cigarette company behaviour. In particular, our analyses show that much of the cigarette manufactures’ behaviour can be explained by Federal Trade Commission and related government actions, rather than conspiracy or fraudulent acts. We find the economic evidence is inconsistent with an effective conspiracy to suppress information on either smoking and health or the development and marketing of potentially safer cigarettes. Regarding ‘lower tar’ and ‘light’ cigarettes, the economic evidence indicates that the cigarette manufacturers responded to government and public health initiatives, and that disclosing more information on smoking compensation earlier than the cigarette companies did would not have had any significant impact on smoking behaviour.