Is harm reduction profitable? An analytical framework for corporate social responsibility based on an epidemic model of addictive consumption

Abstract

This article aims to help resolve the apparent paradox of producers of addictive goods who claim to be socially responsible while marketing a product clearly identified as harmful. It advances that reputation effects are crucial in this issue and that determining whether harm reduction practices are costly or profitable for the producers can help to assess the sincerity of their discourse. An analytical framework based on an epidemic model of addictive consumption that includes a deterrent effect of heavy use on initiation is developed. This framework enables us to establish a clear distinction between a simple responsible discourse and genuine harm reduction practices and, among harm reduction practices, between use reduction practices and micro harm reduction practices. Using simulations based on tobacco sales in France from 1950 to 2008, we explore the impact of three corresponding types of actions: communication on damage, restraining selling practices and development of safer products on total sales and on the social cost. We notably find that restraining selling practices toward light users, that is, preventing light users from escalating to heavy use, can be profitable for the producer, especially at early stages of the epidemic, but that such practices also contribute to increase the social cost. These results suggest that the existence of a deterrent effect of heavy use on the initiation of the consumption of an addictive good can shed new light on important issues, such as the motivations for corporate social responsibility and the definition of responsible actions in the particular case of harm reduction.

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