Tobacco: health effects, and socioeconomic issues

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Tobacco health effects,and socio-economic
issues

• Joy de Beyer
• Tobacco Control Coordinator
• World Bank
• Lecture at George Washington University, October
  24, 2001

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Diseases caused by tobacco use

• Lung cancer
• COPD (emphysema, bronchitis, etc)
• Stroke (bleeding in the brain)
• Heart attack and heart disease
• Narrowing and clogging of arteries
• Cancers of mouth, throat, larynx, esophagus
• Other cancers bladder, kidneys, pancreas
• Peptic ulcers (stomach bleeding)
• Respiratory infections and compromise (cough,
  wheezing etc)
• Gum disease and tooth loss
• Low birth weight and SIDS
• Asthma
• Ear infections
• Compromised sexual performance
• Greater susceptibility to TB?

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Why does tobacco kill?

• Burns at 1000o C
• Cig smoke has 4,000 chemicals, 43 known
  carcinogens/harmful substances (tar, cadmium,
  lead, cyanide, nitrogen oxides, benzo(a)pyrine,
  carbon monoxide, vinyl chloride, acetaldehyde. )
• Damages tissues throughout the body, clogs
  arteries, causes blood clots/bleeding

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Are some cigarettes better?

• No such thing as a safe cigarette
• light, low tar cigarettes are deceptive
• - Manipulation by maker
• - Compensation by smokers so actual yields not
  FTC (machine) yield

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Adult Per Capita Cigarette Consumption and
Major Smoking-and-Health Events -- United States,
1900-1998
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Global Trends in tobacco use

• 1.1 billion smokers, 80 in low- and middle
  income countries (1 in 3 adults)
• 1.6 billion by 2025
• 85 of all tobacco used is smoked
• (cigarettes, bidis, kreteks)

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Smoking is increasing in the developing world

• Male adult prevalence, 1995
• US 28 (was 61 in 1939)
• East Asia 61
• Europe, Central Asia 57
• Latin America, Caribb 40
• South Asia 41 (cigs bidis)
• Sub-Saharan Africa 29

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Burden of Tobacco Deaths Shifting

• World Annual Tobacco deaths (in millions)
• 2000 2030
• Developed 2 3
• Developing 2 7
• World Total 4 10
• 1 in 2 long-term smokers killed by their
  addiction
• 1/2 of deaths in middle age (35-69)

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Tobacco deaths are on the increase in India
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Smoking is more common among the less educated
Smoking prevalence among men in Chennai, India,
by education levels
Source Gajalakshmi and others, background paper
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Nicotine is highly addictive

• Nicotine -- release of serotonin, dopamine,
  norepinephrine
• Neuro-adaptation
• Each year, nearly 35 million people make a
  concerted effort to quit smoking. smoke-free for a year most start smoking again
  within days.

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Helping smokers to quit Cessation Treatments

• Cessation support from health professionals is
  key
• NRTs double the effectiveness of cessation
  efforts
• Quit lines, community support, etc., also work
• Governments may increase accessibility and
  affordability of NRTs by
• OTC sales, allowing advertising, licensing
• Conducting more studies on cost-effectiveness
  (especially in low/middle income countries)
• Considering NRT subsidies for poorest smokers

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Unless current smokers quit, smoking deaths will
rise dramatically over the next 50 years
Source Peto and others, 1994 Peto, personal
communication.
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Effective Interventions

• Information
• Health warnings on tobacco products
• Comprehensive bans on ALL advertising and
  promotion
• Smoking bans in public places (including work
  places)
• Cessation support

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Comprehensive advertising bans reduce cigarette
consumption Consumption trends in countries with
such bans v. those with no bans(n102 countries)
Source Saffer, background paper
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Taxation is the most effective measure

• Higher taxes induce quitting and prevent starting
• A 10 price increase reduces demand by
• 4 in high-income countries
• 8 in low or middle-income countries
• Young people and the poor are the most price
  responsive

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Price Elasticity EvidenceAs real price
decreases, consumption increasesEvidence from
South Africa
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Evidence from the UK
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Why do policy makers resist tax increases?Will
higher tobacco taxes

• Reduce revenues ?
• Tobacco is a good source of revenue. Revenues
  rise as a result of higher taxes
• Cause job losses ?
• Farmers, tobacco industry workers, others
• Increase smuggling ?
• smuggling loses revenues, and is a crime
• Hurt poor smokers ?

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Tobacco Taxes generate Revenues
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Tobacco Taxes- Important source of revenue!
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As Cigarette Tax Rises Revenue Increases Tax per
pack and cigarette tax revenues in Norway,
1990-1998
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Revenue Generating Potential of Tobacco Taxes

• As price rises, consumption falls, but by less
  than the percentage rise in price (demand is
  price-inelastic).
• As incomes rise, so does consumption - and total
  revenue (the income elasticity of demand is
  greater than one).
• Production can be closely supervised by the
  government easy to collect taxes.

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Cigarette tax levels are lower in low or
middle-income countries
Source Authors calculations
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Total Tobacco Taxes as of Retail Price in
Mediterranean Countries
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Low cigarette prices in Eastern Europe
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Studies on the employment effects of dramatically
reduced or eliminated tobacco consumption
SourceBuck and others, 1995 Irvine and Sims,
1997 McNicoll and Boyle 1992, van der Merwe and
others, background paper Warner and others 1996

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What about Smuggling?

• More smuggling if
• Public is tolerant
• Controls are weak
• corruption in the country is high
• tobacco industry is complicit
• organized crime plays a big role

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Tobacco smuggling tends to rise in line with the
degree of corruptionSmuggling as a function of
transparency index
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Smuggling What is the Solution?Canadian
Government reduced tobacco tax rates dramatically
in February 1993
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Smuggling Sweden decreased cigarette taxes (17)
due to fear of smuggling in 1998
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What about the impact on poor smokers?

• Poor smokers tend to spend the highest of
  income on tobacco
• How do they react to a tax/price rise ?
• more likely to quit/reduce consumption, which
  will improve health outcomes, release income for
  other uses
• increased tax revenue can be used in ways that
  benefit poor
• Help smokers who want to quit

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High opportunity Cost Evidence from Belarus
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High opportunity cost Evidence from Bulgaria
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Allocating Tobacco Expenditure to Other Goods and
ServicesBetter Nutrition, Better Health
Evidence from Hungary
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Why should governments intervene?Economic
rationale market failures

• People do not know the risks of tobacco use
• Most smokers start young protect youth
• Nicotine is VERY addictive
• Tobacco users impose costs on others
• second hand smoke harms non-smokers
• children and infants need protection
• health care costs (families and government)
• opportunity cost for families

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Protect YouthSmoking and Addiction Starts Young
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Protect YouthSmoking and Addiction Starts Young
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Key stakeholders

• Ministry of Finance Tobacco Tax Revenues
• Customs Administration Smuggling, Border Control
• Ministry of Labor Farmers and Manufacturing
  Labor
• Ministry of Agriculture Tobacco Production
• Ministry of Education Youth education on tobacco
• Smokers Low prices, variety and appealing
  products
• Producers Profit, market share, sales
• Ministry of Trade Export earnings from tobacco