In a significant policy reversal, New Zealand’s government plans to scrap the “generational smoking ban,” a groundbreaking law aimed at curbing smoking rates. Initially passed in 2022, the law intended to progressively raise the minimum age for smoking, dramatically reduce nicotine levels in tobacco products, and limit tobacco sales to designated stores, reducing the number from 6,000 to 600 nationwide.
The original policy was designed to save lives and reduce healthcare costs associated with smoking-related illnesses. However, concerns about the emergence of a black market and the economic implications of the ban have led to its repeal.
This development in New Zealand serves as a compelling case study of government intervention in controlling demerit goods. The decision to repeal the ban reflects the complex interplay between public health objectives and economic considerations, highlighting the challenges governments face in implementing policies that restrict access to goods harmful to society and individuals.
THINK LIKE AN ECONOMIST!
Q1. Define ‘demerit good’
Q2. Explain the objectives of New Zealand’s original smoking ban policy.
Q3. Analyse the economic factors leading to the repeal of the smoking ban.
Q4. Discuss whether government intervention is required in reducing the consumption of demerit goods like tobacco.
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