Tobacco Facts
Tobacco Impact on Health and Health Care Costs
Adult Smoking Rate,
Number of Adult Smokers,
Deaths caused by tobacco,
New Yorkers alive with tobacco-caused illness – 570,000
Annual health care expenditures caused by tobacco, New York 2006 - $8.17 billion
Annual Medicaid expenditures caused by tobacco, New York 2006 - $5.4 billion
Annual tobacco-caused productivity losses from premature death,
Tobacco-caused health costs and productivity losses per pack of cigarettes sold - $21.91
Current average retail price of cigarettes - $5.82
Teenage Smoking
Middle School students who smoke, New York 2006 – 4.1%
High School students who smoke, New York 2006 – 16.3%
Kids under 18 who became regular smokers, New York 2006- 27,700
Youths ages 0 – 17 projected to die from smoking,
Public Health Impact of $1.25 Cigarette Tax Increase
20% increase in price = 5% decrease in adult prevalence = 140,000 fewer adult smokers
140,000 fewer adult smokers = 37,200 fewer tobacco-caused deaths
20% increase in price = 13% decrease in youth prevalence = 9,000 fewer high school smokers
20% increase in price = 243,500 kids alive today who will not become smokers, saving 77,800 from tobacco-caused death
How do we know a tax increase will lead to decreased consumption? A paper, (“Cigarette Demand: A Meta-Analysis of Elasticities,” by Craig A. Gallet and John A. List, published in the Journal Health Economics, V. 12, p.821-835) examined 523 published estimates of cigarette price elasticity from the academic literature. It found a median adult short-run price elasticity of 0.40 (long-run elasticity was 0.44). This means that for every 10 percent increase in price, there is a 4 percent decrease in consumption. About half the decreased consumption is due to adult smokers quitting, and half due to smokers who continue smoking at a reduced rate.
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