February 14, 2005

Economics professor to receive President’s Award

Craig Gallet is the recipient of the 2004-05 President’s Award for Research and Creative Activity. Gallet, an assistant professor of economics, won the award for his research regarding the impact of public policy on the cigarette industry. He will receive the award and present a lecture on his research at 4 p.m., March 2 in the Hinde Auditorium. A reception will follow.

Photo of: Craig Gallet

Gallet’s research addresses consumer reaction to public policies regarding smoking and cigarettes. His findings show that people have become less responsive to price increases than before, in part because the market has changed.
“This would be consistent with a shift in the nature of smokers,” Gallet said. “There are fewer social smokers, and instead we see a move towards more addicted, hard-core smokers that are not as responsive to price changes.”
Gallet’s research also demonstrates that the cigarette industry has become less competitive, coinciding with a decrease in supply. With a less available supply, people are not able to consume as many cigarettes.

The two time periods in public policy that have been the most influential on the cigarette industry are the 1960s and from the 1980s onward, Gallett says. In the 1960s the federal government began to enact policies to reduce demand, such as placing Surgeon General’s warnings on cigarette packages and limiting cigarette advertising on radio and television. Starting in the 1980s and beyond, states have increasingly placed limits on smoking in specific locations.

The lecture will also cover what determines a particular policy, such as why California’s bans on smoking are much more restrictive than states like Alabama or Nevada.

Gallet’s area of specialty is industrial organization, and his previous research has covered a wide array of industries, including the lemon and beer industries. Gallet has published papers in several refereed journals, including six papers on his research on the cigarette industry.

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