However, while this issue is undoubtedly interesting and important for governments, it is a much less important consideration in developing rational economic policies towards tobacco. The social costs of tobacco are not just paid by governments. A high proportion of smoking-attributable costs is borne by private individuals or by business. Whether government budgets gain a net benefit from tobacco depends largely on tobacco tax rates and health care arrangements. The answer to this second question is almost certainly no .
Smokers tend to have high health care costs during their lifetimes.
Non-smokers, on the other hand, have higher life expectancies than smokers and so may use health care services for longer. The only way to compare different temporal profiles of costs and benefits is to convert them to values expressed in a common time period, by means of discounting . And while the outcome of the analysis is crucially dependent on the discount rate chosen, determining an appropriate rate is far from straightforward. On balance, it seems probable that the lifetime costs of smokers and non-smokers do not differ greatly. Nevertheless, when smoking prevalence is rising, the total net annual smoking-attributable health care costs will almost certainly be high because the benefits accrue much later than the costs.