Smoking's Real Cost Reaches $40 Per Pack Over Lifetime, Duke Study Concludes

In their new book "The Price of Smoking," Duke health economists calculated this sum by analyzing all the costs of smoking -- personally, to the smoker's family and to society at large

Monday, Nov. 22, 2004 | DURHAM, N.C. -- America’s 51 million cigarette smokers already bemoan the high cost of their habit, but what would they do if they knew that the real price, over a lifetime of smoking, amounts to nearly $40 per pack?

In their new book "The Price of Smoking," Duke University health economists calculated this sum by analyzing all the costs of smoking -- personally, to the smoker’s family and to society at large.

Their analysis found that the cost for a 24-year-old smoker over 60 years was $220,000 for a man and $106,000 for a woman, or a total of about $204 billion nationally over 60 years. The figures include expenses for cigarettes and excise taxes, for life and property insurance, medical care for the smoker and for the smoker’s family, and lost earnings due to disability.

Costs borne only by the smoker amounted to $33 of the $40-per-pack total, or $182,860 for a man and $86,236 for a woman over the smoker’s lifetime. Incidental costs such as higher cleaning bills and lower resale values on smoky cars were not included.

The study differs from previous smoking studies in that it comprehensively analyzes a wider range of costs over a smokerfs entire lifetime, drawing on such data as Social Security earnings histories dating back to 1951. Most smoking studies rely on data that provide a snapshot of annual costs, said co-author Frank Sloan, professor of economics and director of the Center for Health, Policy, Law and Management at Duke’s Terry Sanford Institute of Public Policy.

The "life cycle" method used in this research could prove equally enlightening in the study of other health behaviors, such as obesity and excess alcohol use, Sloan added.

The study calculates costs to the smoker’s family separately from costs to the smoker himself, figures that most economists lump together.

"Given the high rate of divorce and the questionable assumption that spouses condone smoking on the part of their husbands or wives, we believed it made more sense to separate costs to the smoker from costs to his family," Sloan said. Those costs amount to $23,407 over the smoker’s lifetime, or about $5.44 of the $40-per-pack total.

The authors found that smokers’ costs to society are less than generally believed -- about $1.44 of the $40-per-pack total -- when costs to the smoker’s family are not included.

"The reason the number is low is that for private pensions, Social Security, and Medicare -- the biggest factors in calculating costs to society -- smoking actually saves money," Sloan said. "Smokers die at a younger age and don’t draw on the funds they’ve paid into those systems."

Using this figure, some economists might suggest that cigarette excise taxes in many states already are high enough to recover society’s portion of the cost of smoking.

But when the combined costs to society and to other family members are considered ($6.88 per pack), one might conclude instead that excise taxes are far too low, Sloan said.

Given the high costs and adverse effects of smoking on individuals, it is "remarkable," the authors conclude, that funds from the 1998 settlement involving 46 state attorneys’ general and major tobacco manufacturers largely are not being spent on smoking-cessation or related programs. Many states are using the funds to cover budget deficits or, as in North Carolina, on economic development in tobacco communities

Though tobacco-control programs and cigarette tax hikes can help curb the high costs of smoking, the authors concluded, "it will be necessary for persons aged 24 and younger to face the fact that the decision to smoke is a very costly one -- one of the most costly decisions they make."

The study’s co-authors were Duke health policy research associate Jan Ostermann, Gabriel Picone of the University of South Florida College of Business Administration, and Duke health policy professors Christopher Conover and Donald H. Taylor Jr.

The research was supported in part by a grant from the National Institute on Aging.

"The Price of Smoking" was published in November 2004 by MIT Press.

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