Panel:
Tobacco Costs: Present and Future Measurements and Effects
(Health)
*Names in bold indicate Presenter
Despite decades of aggressive anti-tobacco initiatives (including increased taxes, public smoking bans, and continuous efforts to communicate the harms associated with smoking), the Centers for Disease Control reported that 19.3 percent of U.S. adults, or 47 million people, still used tobacco products in 2017.1 In terms of medical expenditures and lost productivity, the annual cost of tobacco use is estimated to be over $300 billion.2 These costs and resulting health effects have numerous impacts: on wage differentials, on public expenditures for health services to treat tobacco related illness, and on newer substitutes for smoking such as e-cigarettes.
While tobacco use has declined significantly since the 1960s, e-cigarettes – devices that simulate smoking but do not contain tobacco – are becoming increasingly common, with 15.5% of adults using these products at some point. E-cigarettes may allow addicted smokers to consume nicotine in a less harmful manner but their long-term effects are unclear and e-cigarettes could re-normalize smoking. For that reason, governments are beginning to implement policies designed to reduce e-cigarette use.
This panel consists of three papers that use different methods to examine the consequences of smoking and how cigarette taxes affect substitution towards e-cigarettes. Given the high costs of smoking and the growing popularity of e-cigarettes in the U.S., the findings from these studies offer new and timely information that will directly inform policy makers. The first paper estimates whether smokers’ wages are lower due to employer-sponsored health insurance mandated under the Affordable Care Act (and therefore if smokers “pay” for their own medical expenditures). The paper uses data on income, employer-sponsored health insurance coverage, smoking status, and firm size from the 2006 to 2014 waves of the Medical Expenditure Panel Survey (MEPS) in a difference-in-difference framework. The second paper estimates the effect of e-cigarette taxes on e-cigarette use, tobacco cigarette use, and dual use of these products among adults. The third paper builds an estimate of smoking's cost to a public payer, Mississippi Medicaid, using administrative claims for tobacco-related illness and the smoking-attributable fractions of disease incidence to generate an estimate of total health expenditures and proportion of program spending.
Individually the papers approach known tobacco-related health costs with new and interesting data and methodologies. Together they show the diversity of the sources of cost and the problems of completely measuring those costs. Such findings may aid in development and parameterization of Pigouvian tax policies to capture the true costs of tobacco use and hasten the reduction of smoking. The session is directly in line with the APPAM conference theme as it provides rigorous evidence on pressing policy questions. Further, the session brings together a diverse set of participants in terms of gender, race, career stage, and institution.
[1] https://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm
[2] https://www.cnbc.com/2018/11/08/cdc-says-smoking-rates-fall-to-record-low-in-us.html
