As its initial broadside, the WB recently published an astonishing report. The following paper exposes the many follies and economic errors in what is not a decent economic study, but a document for crusaders. The estimated health risks from smoking have significant external financial consequences for society. Studies at the national level indicate that cigarettes are self-financing since external costs such as those due to illnesses are offset by cost savings associated with premature death, chiefly pension costs. This paper extends this analysis to all 50 states and considers the costs considered in the state attorneys general suits against the cigarette industry.
Cigarettes are always self-financing from the standpoint of costs to each state.
The extent of the cost savings is less than at the federal level. However, smokers' higher medical costs are outweighed by reduced nursing home expenditures, lower pension costs, and excise taxes, where each of these factors alone usually exceeds the medical cost effect. Far too often we hear the antismoking lobbyists from the various ministries of health making dramatic accusations of smokers' cost to society, in the attempt to force them to feel guilty, and change their behaviour. The following chart may help make Canadian smokers aware of the economic importance, and power. Canadian smokers contribute to their economy 4.5 times more than their American counterparts.