Economics of Tobacco Use and Help-Seeking Behavior

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Economics of Tobacco Use and Help-Seeking Behavior

• Bishwa Adhikari, Ph.D., Economist
• Office on Smoking and Health
• Centers for Disease Control and Prevention
• Atlanta, GA
• North America Quitline Consortium
• Phoenix, AZ
• June 9, 2009

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Health and Economic Burden of Smoking

• Smoking is the leading preventable cause of
  mortality and morbidity
• Approximately 43 million Americans are current
  smokers and number of former smokers is higher
  than the current smokers
• National prevalence of smoking was about 42 in
  1965 and in 2007 decreased to around 20
• Smoking has been established as a risk factor for
  various forms of cancers, cardiovascular and
  respiratory diseases
• More than 443,000 deaths, 167 billion in medical
  costs and productivity losses annually are
  attributed to smoking
• Annual smoking-attributable mortality rates have
  declined in most states

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Cigarette Smoking by Socio-demographic
Characteristics

• In 2007, 19.8 of adults smoked cigarettes in the
  USA
• Estimates by age 1824 years (22.2), 2544
  years (22.8), 4564 years (21.0), and 65 years
  or older (8.3) smoke
• Higher prevalence of smoking among men (22.3)
  than women (17.4)
• Estimates among race/ethnicity American
  Indians/Alaska Natives (36.4), African Americans
  (19.8), Whites (21.4), Hispanics (13.3), and
  Asians (9.6)
• Cigarette smoking prevalence is highest among
  adults with GED diploma (44.0) and lowest among
  adults with a graduate college degree (6.2)
• Smoking is more common among adults below the
  poverty level (28.8) than among those at or
  above the poverty level (20.3)
• Social determinants of health (e.g. poverty,
  education, employment) influence smoking

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Sourcehttp//apps.nccd.cdc.gov/statesystem/
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Sourcehttp//apps.nccd.cdc.gov/statesystem
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Consumer Behaviors

• Tobacco use is an addictive behavior
• Demand for cigarette responds to changes in
  prices (direct and indirect)
• Retail price
• Smoking restrictions in public places and fines
• Time and discomfort
• Health consequences
• Demand for cigarette is inversely related to
  retail price of cigarettes
• 10 increase in price results in 4 decrease in
  demand
• Fed. Tax increase in April, 2009 will decrease
  cigarette demand
• Higher cigarette prices lead to increased demand
  for other tobacco products (substitution effect)

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Price Elasticity of Cigarette Demand
Age group Total elasticity Prevalence elasticity Cig. per day per smoker
12-17 -1.40 -1.20 -0.25
18-25 -0.89 -0.74 -0.20
26-35 -0.47 -0.44 -0.04
36-74 -0.45 -0.15 -0.15
All adults 20-74 -0.42 -0.26 -0.10
Source K.E Warner, Smoking and health
implications of a change in the federal cigarette
excise Tax, JAMA. 19862551028-1032
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Consumer behaviors

• Demand for cigarette is also inversely related to
  income
• Price sensitivity is inversely related to age
  (youth are more sensitive to price)
• Cigarette demand is less sensitive among educated
  or richer
• Demand is also affected by
• advertisement and promotional activities by
  tobacco industry
• anti-tobacco campaigns by governments and other
  organizations

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Quitlines in the USA

• According to North American Quitline Consortium
  (2009)
• 328,795 smokers called quitlines to seek help in
  2006
• Less than 1 of the countrys total smokers
• Additional resources (e.g. funding) would help
  increase the number of tobacco users receive
  quitline services
• per capita funding for quitlines in fiscal year
  2006 was 22 cents and per smoker funding was
  1.10
• CDC recommends 3.49 per capita funding for
  cessation services
• Quitlines have capacity to reach 16 of the
  smokers annually
• Utilized capacity would increase the number of
  smokers receiving quitline services to
  approximately 7 million per year
• increase quit attempts, reduce relapse rates and
• Increase number of quitters per year

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Recent Economic Crisis and Tobacco USE

• Current economy will prompt smokers to change
  their smoking habits
• cut back on cigarettes or attempt to quit smoking
• seek smoking cessation services
• Unemployment may play a significant role in
  establishing smoking habit
• odds of smoking among unemployed is higher
  (British study)
• Recent federal tax increase of 0.65 per pack
  will reduce smoking prevalence and increase
  demand for cessation services
• decrease demand for cigarettes by 6
• decrease smoking prevalence among youths by 18
• approximately 1.7 million total quitters

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Recent Economic Crisis

• Continued economic recession will drive more
  people to Quitlines
• Due to the income responsiveness of cigarette
  demands
• If economic stimulus funds become available to
  states, they will be able to increase the
  quitlines coverage and promotions
• Economic stimulus bill allocated 75 million for
  tobacco cessation services
• Increase in availability of medications and self
  help materials through quitlines will increase
  the volume of callers
• Utilize low-cost promotional strategies to
  counter economic crisis
• Develop strong linkages with healthcare providers
• Clinical interventions motivate patients to quit
  smoking or encourage them to call quitlines

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Conclusion

• Smoking prevalence has declined in last few
  decades
• Declines in prevalence occurred as a result of
  1964 Surgeon Generals report on smoking, which
  increased awareness about the health consequences
  of smoking
• Declines in prevalence also because of the
  ongoing documentations of the economic
  consequences of smoking
• Excise tax increase and tobacco control policies
  have also contributed to the decline
• Current economic situation is an opportunity to
• prompt smokers try to quit smoking
• reduce overall smoking prevalence
• lower smoking initiations among youths and young
  adults
• reduce the health and economic burden of smoking
• Current economic climate is an opportunity to
• increase awareness of Quitlines and services
  provided
• increase level of quitlines funding to expand
  cessation services
• target populations that are disproportionately
  affected by smoking

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Contact information

• Bishwa Adhikari, Economist
• Email bia6_at_cdc.gov
• Phone [phone]
• Web http//www.cdc.gov/tobacco