Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Is a society with smokers profitable?

20.07.2009
The latest rise in the indirect taxation on tobacco and alcohol took place in June. The most popular brand of cigarettes went up in price from 3.10 euros to 3.30 euros per packet.

Are these taxes a form of dissuasion or a way of compensating the rest of society for the harm generated by those who smoke? A study by the Polytechnic University of Cartagena has looked into the most significant questions concerning the tobacco economy.

The research, carried out by Ángel López and Arántzazu Viudes, reviews the main economic arguments for the analysis of the policies to control tobacco addiction and describes the market failures from different paradigms.

As López declared to SINC, "we have not attempted to verify a specific hypothesis but rather carried out an appraisal of the studies on tobacco consumption from the economic point of view, including both the traditional vision and the more recent progress". It can be seen from this review, for example, that smoking is a personal choice which can generate net losses of welfare for other members of society and for the family of the smoker but, above all, for the person in question. "Upon this basis there exists an economic justification for corrective interventions by the State", the researchers explained.

The article, which has recently been published in the Revista Española de Salud Pública (Spanish Magazine of Public Health), also discusses two of the most significant preventive measures nowadays: the ban on smoking in bars and restaurants and the taxes on payment in tobacco.

The economists put forward the following argument: "the measures depend on the mechanisms which generate losses of welfare. The taxes have traditionally been justified as corrections for the costs imposed on the rest of society, due either to a supposed imbalance between taxes and payments from the public sector or to the harm caused by secondhand tobacco".

The advantages of raising taxes

The question which then arises is whether the taxes are sufficient for the costs generated by tobacco. For López, "if we bear in mind all the significant costs, the evidence available indicates that this is not so".

In their work, and according to the evidence collated, the financial externalities are partly compensated for by the level of taxation applied in many industrialized countries. Nevertheless, the most solid justification for increases in taxes lies "in the existence of failures in the sovereignty of the consumer, both when starting to smoke and when attempting to give it up and sticking to such a decision. These failures generate a demand for self-control mechanisms, and the high price is one of the most effective mechanisms", the economist explained.

Under no circumstances can it be said that a society with smokers is per se economically ineffective. According to López, it depends on whether the smokers are fully aware of the harm they cause to themselves and smoke because they want to (not because they cannot overcome the addiction) and whether they compensate the rest of society for the external costs they generate. "It is quite difficult for these premises to be fulfilled", the researchers asserted.

The taxes on tobacco, the study says, can also be justified by the existence of externalities arising from the social use of tobacco and by the possible inappropriateness of regarding the costs imposed by secondhand tobacco affecting the rest of the family as private costs. The restrictions on consumption in closed public places is another powerful self-control mechanism and represents "a second solution to the problem of the externalities arising from secondhand tobacco".

According to López, "both taxes and the restrictions on consumption are measures which impose losses of welfare on the people who smoke with full sovereignty, in other words, those who value the pleasure of smoking more than the present and future costs of the habit. Nevertheless, in view of the estimates of the private costs and the evidence that most smokers want to stop give up, the hypothesis that taxes and restrictions on consumption increase net welfare gains plausibility. In any case, the researchers argue that "measures of prevention and control which increase the options of individuals without interfering in the decisions of those who wish to smoke with full sovereignty are desirable".

The policies in the study which are regarded as being inspired in the principles of liberal paternalism "may produce positive results in the future, although there is still much to be done as regards their potential implementation and evaluation", the experts concluded.

References:

Ángel López Nicolás; Arántzazu Viudes de Velasco. "El control del tabaquismo desde la perspectiva de la economía". Revista Española de Salud Pública. Número 83(1), páginas 9-23. Enero-febrero de 2009.

SINC | EurekAlert!
Further information:
http://www.plataformasinc.es

More articles from Studies and Analyses:

nachricht Antarctic Ice Sheet mass loss has increased
14.06.2018 | Technische Universität Dresden

nachricht WAKE-UP provides new treatment option for stroke patients | International study led by UKE
17.05.2018 | Universitätsklinikum Hamburg-Eppendorf

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Temperature-controlled fiber-optic light source with liquid core

In a recent publication in the renowned journal Optica, scientists of Leibniz-Institute of Photonic Technology (Leibniz IPHT) in Jena showed that they can accurately control the optical properties of liquid-core fiber lasers and therefore their spectral band width by temperature and pressure tuning.

Already last year, the researchers provided experimental proof of a new dynamic of hybrid solitons– temporally and spectrally stationary light waves resulting...

Im Focus: Overdosing on Calcium

Nano crystals impact stem cell fate during bone formation

Scientists from the University of Freiburg and the University of Basel identified a master regulator for bone regeneration. Prasad Shastri, Professor of...

Im Focus: AchemAsia 2019 will take place in Shanghai

Moving into its fourth decade, AchemAsia is setting out for new horizons: The International Expo and Innovation Forum for Sustainable Chemical Production will take place from 21-23 May 2019 in Shanghai, China. With an updated event profile, the eleventh edition focusses on topics that are especially relevant for the Chinese process industry, putting a strong emphasis on sustainability and innovation.

Founded in 1989 as a spin-off of ACHEMA to cater to the needs of China’s then developing industry, AchemAsia has since grown into a platform where the latest...

Im Focus: First real-time test of Li-Fi utilization for the industrial Internet of Things

The BMBF-funded OWICELLS project was successfully completed with a final presentation at the BMW plant in Munich. The presentation demonstrated a Li-Fi communication with a mobile robot, while the robot carried out usual production processes (welding, moving and testing parts) in a 5x5m² production cell. The robust, optical wireless transmission is based on spatial diversity; in other words, data is sent and received simultaneously by several LEDs and several photodiodes. The system can transmit data at more than 100 Mbit/s and five milliseconds latency.

Modern production technologies in the automobile industry must become more flexible in order to fulfil individual customer requirements.

Im Focus: Sharp images with flexible fibers

An international team of scientists has discovered a new way to transfer image information through multimodal fibers with almost no distortion - even if the fiber is bent. The results of the study, to which scientist from the Leibniz-Institute of Photonic Technology Jena (Leibniz IPHT) contributed, were published on 6thJune in the highly-cited journal Physical Review Letters.

Endoscopes allow doctors to see into a patient’s body like through a keyhole. Typically, the images are transmitted via a bundle of several hundreds of optical...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

Munich conference on asteroid detection, tracking and defense

13.06.2018 | Event News

2nd International Baltic Earth Conference in Denmark: “The Baltic Sea region in Transition”

08.06.2018 | Event News

ISEKI_Food 2018: Conference with Holistic View of Food Production

05.06.2018 | Event News

 
Latest News

Better model of water under extreme conditions could aid understanding of Earth's mantle

21.06.2018 | Earth Sciences

What are the effects of coral reef marine protected areas?

21.06.2018 | Life Sciences

The Janus head of the South Asian monsoon

21.06.2018 | Earth Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>