The Price 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.

[Cross-posted at Same Facts]

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Harold Pollack

Harold Pollack is the Helen Ross Professor at the School of Social Service Administration at the University of Chicago.