States feel the economic effects of smoking through increased health and medical costs and lost productivity of its citizens.
The Centers for Disease Control (CDC) recommends that states fund tobacco control programs in order to reduce the economic burden of smoking’s effects.
Some states have been cutting back on the funding of these programs as a cost-saving measure. But a study reveals that it is cheaper for states in the long run to fund tobacco control programs than it is to not.
Economic Examination of Tobacco
The study used data collected between 1991 and 2007. During this time, tobacco control programs were financed using:
- the tobacco tax;
- money from the Tobacco Master Settlement Agreement; and
- state and private funding.
The CDC recommends a dollar amount that states should be spending in order to make their tobacco control programs successful. The study notes that by 2010, states were spending on average merely 17% of the recommended amount by the CDC. Additionally, in recent years, the taxes consumers pay on cigarettes has become relied on more as a consistent stream of revenue for states.
So which is better economically: increasing revenue raised by selling cigarettes or spending millions of dollars on tobacco use prevention?
More Tax or More Spending?
The study concluded that following the CDCs recommendation would result in a savings for state governments of between 14 and 20% of the cost of tobacco control programs in the future.
These tobacco control programs have been shown to have a long-term effect on the demand for cigarettes and tobacco products. This trend only increases over time as the programs’ effectiveness has an impact and more and more people quit smoking. Tobacco control programs lower the economic costs of medical and insurance payouts for tobacco-related health problems, as well as the cost of lost productivity.
What is the Real Cost of Tobacco?
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