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 New study: How does Europe become a leading player for software and IT services?
03.04.2017 | Fraunhofer-Institut für System- und Innovationsforschung (ISI)

nachricht Reusable carbon nanotubes could be the water filter of the future, says RIT study
30.03.2017 | Rochester Institute of Technology

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: Making lightweight construction suitable for series production

More and more automobile companies are focusing on body parts made of carbon fiber reinforced plastics (CFRP). However, manufacturing and repair costs must be further reduced in order to make CFRP more economical in use. Together with the Volkswagen AG and five other partners in the project HolQueSt 3D, the Laser Zentrum Hannover e.V. (LZH) has developed laser processes for the automatic trimming, drilling and repair of three-dimensional components.

Automated manufacturing processes are the basis for ultimately establishing the series production of CFRP components. In the project HolQueSt 3D, the LZH has...

Im Focus: Wonder material? Novel nanotube structure strengthens thin films for flexible electronics

Reflecting the structure of composites found in nature and the ancient world, researchers at the University of Illinois at Urbana-Champaign have synthesized thin carbon nanotube (CNT) textiles that exhibit both high electrical conductivity and a level of toughness that is about fifty times higher than copper films, currently used in electronics.

"The structural robustness of thin metal films has significant importance for the reliable operation of smart skin and flexible electronics including...

Im Focus: Deep inside Galaxy M87

The nearby, giant radio galaxy M87 hosts a supermassive black hole (BH) and is well-known for its bright jet dominating the spectrum over ten orders of magnitude in frequency. Due to its proximity, jet prominence, and the large black hole mass, M87 is the best laboratory for investigating the formation, acceleration, and collimation of relativistic jets. A research team led by Silke Britzen from the Max Planck Institute for Radio Astronomy in Bonn, Germany, has found strong indication for turbulent processes connecting the accretion disk and the jet of that galaxy providing insights into the longstanding problem of the origin of astrophysical jets.

Supermassive black holes form some of the most enigmatic phenomena in astrophysics. Their enormous energy output is supposed to be generated by the...

Im Focus: A Quantum Low Pass for Photons

Physicists in Garching observe novel quantum effect that limits the number of emitted photons.

The probability to find a certain number of photons inside a laser pulse usually corresponds to a classical distribution of independent events, the so-called...

Im Focus: Microprocessors based on a layer of just three atoms

Microprocessors based on atomically thin materials hold the promise of the evolution of traditional processors as well as new applications in the field of flexible electronics. Now, a TU Wien research team led by Thomas Müller has made a breakthrough in this field as part of an ongoing research project.

Two-dimensional materials, or 2D materials for short, are extremely versatile, although – or often more precisely because – they are made up of just one or a...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Expert meeting “Health Business Connect” will connect international medical technology companies

20.04.2017 | Event News

Wenn der Computer das Gehirn austrickst

18.04.2017 | Event News

7th International Conference on Crystalline Silicon Photovoltaics in Freiburg on April 3-5, 2017

03.04.2017 | Event News

 
Latest News

DGIST develops 20 times faster biosensor

24.04.2017 | Physics and Astronomy

Nanoimprinted hyperlens array: Paving the way for practical super-resolution imaging

24.04.2017 | Materials Sciences

Atomic-level motion may drive bacteria's ability to evade immune system defenses

24.04.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>