Negative Externalism In Tobacco Law

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The European Union has focused on the impact of tobacco use with the first EU tobacco-control legislation in the late 1980s. The EU legislated policies have been further developed with its certain purposes. The EU aimed to encourage tobacco users to cease and protect their citizens who are exposed to second-hand smoke in order that citizens could reside and work in smoke-free environments. The reason why the EU has endeavored to intervene with the production and consumption of tobacco has originated in one factor: negative externality. Negative externality can be defined as an adverse effect of production and consumption of goods or services, which imposes external costs on the third party outside the market. The activity of producers and consumers may affect the economic welfare of bystanders with no corresponding appropriate compensation because most producers and consumers consider only the benefits and costs to them. Thus, the EU has highlighted the importance of protecting and rising the economic welfare of the third parties by intervening in tobacco market with different economic approaches to reducing negative externality. This essay will explain what the negative externality is, how various policies against tobacco use have applied in realty and finally evaluate them in terms of their limitations. A large number of Western economists argue that the market lies at the heart of today’s economic prosperity in the industrial world. A market is any place in which sellers

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