NCPA - National Center for Policy Analysis


February 3, 2005

Not only are the costs imposed by smokers on others almost entirely avoidable, but smokers save the government money when they die young, says Robert Levy of the Cato Institute.

According to economist Frank Sloan of Duke University, smokers impose $5.55 of costs on others per pack of cigarettes through secondhand smoke. Also, smokers put a strain on pooled-risk programs such as Medicare, costing about $1.44 per pack, by increasing the likelihood of becoming sick.

Yet Levy says almost all of these costs are avoidable:

  • Nonsmokers can readily avoid places where smokers light up, such as on their own private property and government-owned property, the latter being owned by taxpayers.
  • Insurance policies should be allowed to fully reflect the health risks of smoking, resulting in higher premiums or a reduction in benefits.

Perhaps most importantly, premature deaths caused by smoking can generate long-term external benefits in the form of lower retirement and nursing-home costs. "If anything," concludes Sloan, "Medicare should compensate smokers and tobacco companies, not the reverse."

Source: Robert A. Levy, "New Estimate of Smoking Cost Misleading," Heartland Institute, December 1, 2004.


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