Bacon's Rebellion

Democracy Thrives in Sunlight

Smoke Less, Save More

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by

James A. Bacon
in

Source: WalletHub

I have a philosophical aversion to social engineers who continually meddle in other peoples’ business. That includes a resistance to measures that restrict the rights of people to smoke (except when that smoking impairs upon the rights of people not to inhale their smoke). That said, I think smoking is gross and disgusting habit, and I would urge all smokers to quit. The difference between the meddlers and me is that I rely upon moral suasion and social pressure, not the coercive power of the state.

That is preamble to the latest report from the listicle freaks at WalletHub who have compiled the lifetime costs of smoking for cigarette junkies. WalletHub added up out-of-pocket costs (average cost per pack of cigarettes, assuming consumption of one pack per day); opportunity cost (assuming that the smoker had invested the money in the stock market instead); health care costs; income loss due to absenteeism, lower productivity and lower earnings in the workplace; and miscellaneous costs. Most of those costs accrue to the individual doing the smoking.

According to WalletHub, the average life-time cost to a Virginia smoker is $1,359,000. The costs are broken down as follows:

Out-of-pocket cost: $91,418
Financial opportunity cost: $864,459
Health care cost: $128,766
Income loss: $264,351
Other costs: $9,861

Wow, I don’t smoke and never have. Although I still have a few years to go to accrue the full benefits of a life-time of non-smoking, I should be loaded. But I’m not. I haven’t accumulated anything close to $865,000 in stock-and-bond assets. Perhaps that’s because I never put my savings from not smoking a pack per day into the market. My bad.

Bacon’s bottom line: For what it’s worth, Virginia’s smoking costs are the 13th lowest in the country — a fact that can be attributed largely to having the second lowest cigarette tax rate in the country. Add up the taxes over a life-time and impute a return on investment to them, and Virginians are $1.1 million per smoker less badly off. But that doesn’t change the fact that smoking is really stupid, and people should stop.

— JAB

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5 responses to “Smoke Less, Save More”

  1. LarrytheG Avatar
    LarrytheG

    re: ” Most of those costs accrue to the individual doing the smoking”

    Au Contraire!

    YOU and I – ARE paying – if those smokers have the same health insurance we have!!!!

    I DO NOTE a couple of things about Obamacare though –

    1. – one of the factors in the premiums is if the applicant smokes – the insurance companies in some (not all) states CAN charge up to a 50% surcharge.

    2. – one of the included (MEC) services of all the plans is smoking cessation programs.

    but without question -you and I pay – for Medicare, MedicAid and Employer-provided – health costs for smokers.

    1. James A. Bacon Avatar
      James A. Bacon

      For what it’s worth, WalletHub attributes less than 10% of the cost of smoking to health care. While society pays for much, perhaps most, of that, the smokers themselves do incur out-of-pocket expenses for their own medical treatment.

      Then there’s the gruesome reality that because smokers die earlier than non-smokers (on average), society incurs less Medicare and Social Security obligation.

  2. LarrytheG Avatar
    LarrytheG

    people who die of lung cancer and heart disease – do not die quick nor cheap.

    there is a reason why Obamacare allow insurance companies to charge up to a 50% surcharge on exchange policies.

    Neither employer-provided nor Medicare do that.

    ” Smoking costs the United States billions of dollars each year.1,5
    Total economic cost of smoking is more than $300 billion a year, including

    Nearly $170 billion in direct medical care for adults

    More than $156 billion in lost productivity due to premature death and exposure to secondhand smoke”

    http://www.cdc.gov/tobacco/data_statistics/fact_sheets/fast_facts/

    and again , remember the next time we talk about people knowing better what to do with their money than government and your premise that govt has no legitimate role in discouraging use.

    How do you feel about pot and illegal drug use? do you think similarly with respect to the legitimate role of govt in discouraging it? If drugs were not illegal and people could use them legally – would you still consider the involvement of the govt in discouraging it – wrong?

    compare cigarette use with pot/cocaine use…. if you made cigarettes illegal would you end up with the same problem with pot/cocaine?

    😉

  3. slowlane Avatar
    slowlane

    A correction, Jim:….. the WalletHub chart shows that Virginia has the 13th LOWEST smoking cost of all states. I suspected as much, since Virginia and other states mapped in dark-blue have low cigarette tax rates (and overall lower cost of living), while states shown as light-blue have the highest cigarette tax rates (along with higher cost of living including medical costs).

    1. James A. Bacon Avatar
      James A. Bacon

      Slowlane, you really nailed me there! I apologize for the sloppiness. That’s what comes from trying to church out two blog posts in one morning. I’ll make the change.

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