Don Taylor on the costs of smoking

Over at the Incidental Economist, Don Taylor has two terrific posts (here and here) on the personal and social costs of tobacco use.

Much of these posts come from a book Don helped to write called The Price of Smoking. This is an essential reference for anyone interested in tobacco control or the social costs of smoking.

I’m sure that Don will have more to say about these issues. To me, the heart of his posts is the estimate:

We further estimated that the social cost of smoking in 2000 was around $40/pack of cigarettes, distributed as follows:

•$33 private cost: borne by the individual, primarily through a substantially shortened lifespan
•$5.50 quasi-external cost: borne by the smokers’ family through increased health costs, slightly lower wages and other factors
•$1.50 external cost: borne by society, and representing the net effect of things like taxes paid, Medicaid and Medicare payments, and Social Security received

When I read these numbers, I have two reactions. First, we should maintain high tobacco taxes and other policies to discourage smoking. Second, we should use the resulting revenue to help smokers and their families, who bear the lion’s share of tobacco’s economic and human costs.

Drinkers should pay higher taxes, among other reasons, to compensate the rest of us for harmful externalities associated with alcohol use. Not so much the smokers, who deserve sympathy and practical help in addressing the agonizing consequences of tobacco use.

Millions of smokers need help to quit, or need medical services of one sort or another. Tobacco tax revenue should be used to help them.

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

14 thoughts on “Don Taylor on the costs of smoking”

  1. Didn’t see anything there about forest fires.
    How many thousands of acres of forest have been toasted by a cigarette tossed out a window?
    How many houses have burned down by a wayward smoke?

    Figure out the cost of the destroyed structures and landscape…
    Figure out the cost to fight the fires…

    And levy a tax on each pack to pay for all that.

  2. I disagree that we should discriminate amongst addicts this way. We should try to help anyone who wants out. It’s a liberty thing. It is worth it.
    And on a selfish practical basis, smokers are *much* more annoying, and common, than drunks.
    I also find those numbers possibly a bit hard to believe, but I am no expert.

  3. This suggests to me that the appropriate tax on cigarettes is in the neighborhood of $1.50/pack, since the remaining costs are borne by smokers themselves and their families. Maybe a bit extra to fund cessation programs if you want to get all nanny-state about it. How does that compare to current taxes?

  4. The Lord, we are told, helps those who help themselves. Absent persuasive evidence that there is a Lord to do so, I suppose the state allocating revenue from tobacco taxes to help smokers trying to become non-smokers is the next best thing.

    One bit of help I strongly recommend is an iPhone app called QuitIt. (It was a Firefox add-on before that, but I don’t think it has been updated to run with newer versions of the browser.) One plugs in the date one quit, the number of cigarettes smoked per day and the cost of a packet. And then, whenever one opens the app, one sees at a glance how much money one has not-spent on cigarettes and how many cigarettes one has not-smoked, like this:

    Smoke-free: 5 years 9 months 19 days
    Saved: €16,725.45
    Cigarettes: 63557

    Those are my stats, as it happens. After the first 12-18 months had gone by, I never really even thought about smoking again, so the app is now just a sort of curiosity for me. But in the early weeks and months especially, it was (in its Firefox incarnation) an amazingly powerful reinforcer. The numbers were a lot smaller, of course. But even so, being confronted with how much money one is (literally) sending up in smoke really helps stiffen the spine; and at a time when it neuron’s receptors are still adjusting to a life with nicotine, the spine needs all the stiffening it can get. Every aspiring non-smoker should have this app.

    Now, though I don’t remember what, if anything, QuitIt cost at the App Store, it was in any event either free or trivially cheap. So, why do we need any tobacco tax revenue? To buy each quitter an iPhone, obviously, pre-loaded with the app.

  5. There was a famous case about a decade ago someplace in Eastern Europe where the government was proposing the imposition of a big hike in cigarette taxes, revenue supposedly earmarked to cover the state’s burden of paying for the healthcare needs of smokers. Some half-bright bunch of tobacco executives commissioned a team of consultants to produce a study that pronounced as its verdict that smoking saved the state money: smokers tended not to be much sicker than non-smokers during their working lives, and then they tended to die quickly and cheaply of untreatable emphysemia and lung cancer shortly after (or before) retirement – saving the state money on pensions and on the medical care associated with a later, more expensively treatable demise.

    The predictable result of the study, whose factual claims were seen as credible, was revulsion. The argument it put forward (that the state should embrace the poisoning of its retirement-age citizens) was so blood-chillingly inhumane that rather than bolster the tobacco companies’ efforts to block the tax hike the mere existence of the study became a stick with which to beat the companies rhetorically. I seem to recall that the tobacco executives realized this would happen, and tried too late to suppress the report, but it leaked out.

  6. The $33 cost is a reasonable conservative estimate, but I’m not certain that the lifetime benefit from smoking isn’t easily higher for many people than the $150k that would be necessary for smoking to be a reasonable decision. Smoking is a fairly effective anti-depressant and a very effective stimulant; the shortened lifespan greatly reduces the chances of senile dementia; and there’s certainly some pleasure inherent to smoking.

  7. Going along with Warren’s recollection, if you spent tobacco-tax revenue on smokers and their families, especially on healthcare, those cost allocations might shift dramatically. The main reason the smoker’s external costs aren’t overwhelming is that they die so much sooner, on average. What would social security and medicare do without them? (Yes, that’s at least a bit sarcastic.)

    Contra Samchevre, there’s a fair amount of work suggesting that the lifetime benefit of smoking is more analagous to the lifetime benefit of paying protection to the mob. Every day you avoid the pangs of withdrawal. (Attitudes about that withdrawal are interesting — one family member who quit still uses nicotine gum 10 years out; when people ask her if it isn’t a crutch she puts on an air of confusion.)

  8. We could ban all tobacco advertising, including merchandise and event sponsorships. That would cost nothing to government (fines could cover the cost of prosecuting violators), and reduce consumption. Smokers would still have the liberty to seek out tobacco.

  9. There’s a fair amount of work suggesting that the lifetime benefit of smoking is more analagous to the lifetime benefit of paying protection to the mob.

    Yes, definitely. Once you are a regular smoker, you are addicted to nicotine; part of what smoking does then is merely get you to normal.

    But nicotine is also a very effective stimulant, whether you are addicted or not–it can quite effectively get you to “better than normal”.

    (I’m an very occasional smoker–maybe 4 packs a year. I once programmed 36 hours straight at the end of a week that was already at 100 hours with the help of lots of coffee with sugar and a pack of cigarettes; there’s no way I could have done that without stimulants.)

  10. NCG: “And on a selfish practical basis, smokers are *much* more annoying, and common, than drunks.”

    I’m sorry, when was the last time someone assaulted someone else because they were too intoxicated from cigarettes? When was the last time someone ran over a teenager because they were driving while smoking?

  11. “So Carter, are you saying that if taxes > externals, there is no public health problem?”

    If the smokers are covering the externalities, then there isn’t a public health problem, there’s a private health problem.

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