NCPA - National Center for Policy Analysis


August 19, 2005

Exposure to secondhand smoke adds $10 billion in annual costs to the U.S. economy for medical expenses, lost wages and other costs, according to a study by researchers at the Society of Actuaries and the J. Mack Robinson College of Business at Georgia State University.

Researchers examined more than 200 studies published since 1964 and found that, although the percentage of nonsmokers exposed to secondhand smoke has decreased in recent years, the exposure results in $5 billion in annual direct medical costs.

  • Common medical conditions related to secondhand smoke exposure include sudden infant death syndrome, chronic pulmonary disease, asthma and spontaneous abortion.
  • Exposure to secondhand smoke also results in $4.7 billion in annual indirect costs, such as lost wages and expenses related to disabilities.

"If you look at any one individual, the probabilities are pretty low, but if you happen to be the one who gets lung cancer, it's significant to you," says lead study author Donald Behan, a senior research associate at the Robinson College of Business. He added, "There seems to be a relatively greater impact on children than adults."

According to Tim Harris, a member of the SOA board of governors and a principal at actuarial firm Milliman, the study could prompt life and health insurers to charge more to cover those exposed to environmental tobacco smoke. Harris says that current measures of environmental tobacco smoke exposure are imprecise but adds that insurers could ask about exposure at home or work.

Edward Sweda, a senior attorney with the Tobacco Products Liability Project at the Northeastern University School of Law, says the study likely will play a larger role in the public policy debate over smoking bans than in current tobacco litigation.

Source: Theo Francis, "Study Tallies Annual Cost Of Secondhand Smoke," Wall Street Journal, August 17, 2005; based upon Donald F. Behan, Michael P. Eriksen and Yijia Lin, "Economic Effects of Environmental Tobacco Smoke," Society of Actuaries, March 31, 2005.

For text (subscription required):,,SB112423864800615088,00-search.html


Browse more articles on Health Issues