Tobacco: Health and Economics Dr. Joy de Beyer World Bank International Meeting on Economic, Social and Health Issues in Tobacco Control Kobe, Japan, December 3-4, 2001

Health and Economics At first: focus on Health – Impact of tobacco use on health – what works, what doesn ’ t to protect health then: Health OR Economics? ( “ Yes, but ” ) – Many stakeholders – Health versus economic and social issues ? today: Health AND Economics – Policy-relevant global, regional and country-level evidence-based research

Focus on Health Effective measures to protect health Higher cigarette taxes/prices Non-price measures: Information, research, strong warning labels, bans on tobacco advertising and promotion, bans on smoking in public places incl. workplaces Helping smokers quit: cessation support

Price Elasticity Evidence As real price decreases, consumption increases Evidence from South Africa

Comprehensive advertising bans reduce cigarette consumption Consumption trends in countries with strong bans compared with countries with no bans (102 countries) Source: Saffer, 2000

Bans on smoking in public places (transport, hospitals, schools, restaurants, workplaces) Protect against “ passive smoking ” info on 2 nd hand smoke effects can raise public support Workplace bans promote quitting, reduce smoking intensity (some), and are cost- saving to employers What about smoke-free homes ?

Help smokers who want to quit Cessation support Advice from health professionals is key Quit lines, community & family support also work NRTs double the success of quit attempts Governments may make NRTS more affordable and accessible by: u Licensing, OTC sales, allowing advertising u more studies on cost-effectiveness (especially in LDCs) u Considering NRT subsidies for poorest smokers

Focus on Health Things that don ’ t improve health Most “ supply side ” actions do not reduce tobacco use / improve health Prohibition Youth access restrictions Trade restrictions Crop substitution Control of smuggling is the only exception and is the key supply-side measure

Health OR Economics? ( “ Yes, but ” ) Health versus economic and social issues? Tobacco kills, but tobacco also: generates tax revenues provides jobs, incomes and large profits may attract foreign private investment generates export earnings in some countries gives smokers pleasure

Health OR Economics? fears about harm to economies Policy makers (and others) worry that tobacco control will harm the economy: Reduce government revenues Generate unemployment Reduce farmers ’ livelihoods Increase smuggling Cause hardship to smokers and hesitate to adopt and implement strong, comprehensive tobacco measures

Health AND Economics Facts and evidence Policy-relevant global, regional and country-level evidence-based research Do strong tobacco control measures: Reduce tax revenues ? No Revenues rise as a result of higher taxes. Increase smuggling ? Not exactly Role of organized smuggling, corruption Cause net job/income losses ? Not necessarily, but needs more research Hurt poor people ? Some, benefit some

As Cigarette Tax Rises Revenue Increases Tax per pack and cigarette tax revenues in Norway,

Health AND Economics Key Stakeholders in Policy Dialogue Ministries Health: Health care costs Agriculture: tobacco farmers and their livelihood Trade : Tobacco export earnings Labor: jobs related to tobacco Finance and Customs: Tax revenues (profit, excise, income, investment, trade) and smuggling Central, provincial/regional & local govts Tobacco industry

Today: Health AND Economics Most frequently raised issues in policy dialogue Supply side issues Farmers and their livelihoods Smuggling Crop substitution Trade issues (WTO, import duties etc.)

Health and economics for Successful Tobacco Control Partnership is the KEY Join comparative advantages for effective policy dialogue Address concerns of key decision makers Policy relevant research, and Disseminate research evidence

Changing Cigarette Consumption

Conclusion 1. Change in tobacco demand is slow. rising incomes population growth nicotine addiction consumer choice advertising and promotion all increase or maintain tobacco use. The global tobacco market will not “wither away”. 2. Economies change constantly. People made vulnerable may need help to adjust as demand switches to other goods & services.