Economics Trivia - Smoking around the world
Turkey has become the 52nd country to introduce a smoking ban.
70 per cent of all cigarettes are bought in developing countries
One third of all of the cigarettes smoked are lit up by smokers in China
India has a 10th of the planet’s smokers and is one of those nations with a smoking ban (introduced in 2008)
Source: Financial Times Lex Column (20-07-09)
Cash Incentives for Healthy Options
I often use Stephen Landsburg’s famous quote which claims that the whole of Economics can be summed up in four words “people respond to incentives” - so it was interesting to read in my morning newspaper that the Department of Health is considering rolling out a wider programme of cash incentives for people who can demonstrably show that they are making progress towards a healthier lifestyle.
Nicholas Timmins writes in the Financial Times that
“In Dundee, smokers are being offered £12.50 a week by the NHS if carbon monoxide testing shows they have quit. In Essex, pregnant women can claim a £20 food voucher from the NHS after stopping smoking for one week, £40 after four weeks and another £40 at the end of a year if they have still quit. Brighton offers children £15 for quitting smoking for 28 days, while overweight patients in Kent are also being offered incentives for losing weight.”
This short paragraph could form the basis of an excellent discussion about different forms of government intervention designed to affect health outcomes. I try to focus on three key words when teaching the impact of government intervention. Policies tend to work best when they are EFFECTIVE, EFFICIENT and EQUITABLE.
So what roles can direct financial incentives from the taxpayer for people to quit smoking, lose weight or eat better have both in the short term and over a longer time horizon?
If such incentives work what will be the longer term benefits for the health service and for the tax payer?
Are they better than regulations, taxation and attempts to improve information?
Is it fair to appear to reward unhealthy behaviour? What of those tax payers who do not smoke, maintain a healthy diet and weight and who make few if any claims on the health and welfare system?
Can the law of unintended consequences come into play? If you pay teenagers to stop smoking, will more of them start in the first place?
How will the cash payments be used?
End tobacco smoking by 2025?
Could we end the smoking of tobacco in the Uk within a generation. On first glance it looks like one of those utterly grandiose targets that New Labour used to launch (and re-launch) such as abolishing Child Poverty by 2020. But this ultra-ambitious target comes from the Royal College of Physicians who argue that radical measures are needed to curb smoking. They argue that “The primary objective of regulation of smoked tobacco should be to make smoking and smoked tobacco products as unappealing, unattractive, unaffordable and unavailable as possible, as quickly as possible.”
The measures include:
Increase the tax on tobacco by 10% every year
License tobacco retailers and prohibit the sale of smoked tobacco in premises where children are admitted
Crack down on tobacco smuggling, and apply Class A drug penalties for tobacco smuggling and under-age sale
Encourage sale of low cost single day nicotine packs, available from any retail outlet
Permanently exempt medicinal nicotine from VAT
Provide free medicinal nicotine for all smokers on the NHS, not just those on a smoking cessation programme
What do you think?
Ending Tobacco Smoking in Britain is available here
A Licence To Print Money?
An innovative method of internalising the externality of smoking? The introduction of a £10 permit to purchase tobacco products has been proposed in an attempt to increase the cost and inconvenience of buying cigarettes and similar goods.
The ban on smoking in enclosed public spaces which began in England in July 2007 has been touted as a considerable success, contributing to a 7% drop in cigarette sales compared with the year before. But this has not been without unintended consequences, highlighted already on these blog pages. And with approximately one third of imported cigarettes already arriving in the country illegally (at a cost of £2bn per year to the UK Treasury), won’t any attempt to drive up the price of legal tobacco products - and the inconvenience of buying them - simply result in greater demand for smuggled goods?
Perhaps more radical and shocking methods to reduce demand for cigarettes are needed (this link shows some of the campaigns that have been used in various countries.)
Unintended consequences of the smoking ban
Any government intervention in the market can give us cause to consider the Law of Unintended Consequences where a policy decision or action leads to fresh actions which might not have been considered by those putting a policy in place. Some of these knock-on effects can be positive, a windfall that enhances the impact of the original decision. Others can be negative leading to fears of government failure and a deepening of an existing problem or market failure. The smoking ban seems to be providing a rich seam of examples of such unintended blow-back effects.
read more...»Is the Smoking Ban Working?
There are signs that the ban on smoking in public places that was extended to England and Wales last summer is having an effect on the number of people trying to kick the habit. The information Centre for Health and Social Care released data today which said that nearly 165,000 smokers managed to kick the smoking habit in the summer of 2007 with the help of NHS Stop Smoking Services - this is a 28 per cent increase in the number of successful quitters.
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