Economics of Tobacco Use and Help-Seeking Behavior

1. Economics of Tobacco Use and Help-Seeking Behavior Bishwa Adhikari, Ph.D., Economist Office on Smoking and Health Centers for Disease Control and Prevention Atlanta, GA North America Quitline Consortium Phoenix, AZ June 9, 2009

2. Health and Economic Burden of Smoking: • Smoking is the leading preventable cause of mortality and morbidity • Approximately 43 million Americans are current smokers and number of former smokers is higher than the current smokers • National prevalence of smoking was about 42% in 1965 and in 2007 decreased to around 20% • Smoking has been established as a risk factor for various forms of cancers, cardiovascular and respiratory diseases • More than 443,000 deaths, $167 billion in medical costs and productivity losses annually are attributed to smoking • Annual smoking-attributable mortality rates have declined in most states

3. Cigarette Smoking by Socio-demographic Characteristics • In 2007, 19.8% of adults smoked cigarettes in the USA • Estimates by age: 18–24 years (22.2%), 25–44 years (22.8%), 45–64 years (21.0%), and 65 years or older (8.3%) smoke • Higher prevalence of smoking among men (22.3%) than women (17.4%) • Estimates among race/ethnicity: American Indians/Alaska Natives (36.4%), African Americans (19.8%), Whites (21.4%), Hispanics (13.3%), and Asians (9.6%) • Cigarette smoking prevalence is highest among adults with GED diploma (44.0%) and lowest among adults with a graduate college degree (6.2%) • Smoking is more common among adults below the poverty level (28.8%) than among those at or above the poverty level (20.3%) • Social determinants of health (e.g. poverty, education, employment) influence smoking

11. Source:http://apps.nccd.cdc.gov/statesystem/

12. Source:http://apps.nccd.cdc.gov/statesystem

13. Consumer Behaviors: • Tobacco use is an addictive behavior • Demand for cigarette responds to changes in prices (direct and indirect) • Retail price • Smoking restrictions in public places and fines • Time and discomfort • Health consequences • Demand for cigarette is inversely related to retail price of cigarettes • 10% increase in price results in 4% decrease in demand • Fed. Tax increase in April, 2009 will decrease cigarette demand • Higher cigarette prices lead to increased demand for other tobacco products (substitution effect)

14. Price Elasticity of Cigarette Demand Source: K.E Warner, Smoking and health implications of a change in the federal cigarette excise Tax, JAMA. 1986;255:1028-1032

15. Consumer behaviors … • Demand for cigarette is also inversely related to income • Price sensitivity is inversely related to age (youth are more sensitive to price) • Cigarette demand is less sensitive among educated or richer • Demand is also affected by • advertisement and promotional activities by tobacco industry • anti-tobacco campaigns by governments and other organizations

16. Quitlines in the USA • According to North American Quitline Consortium (2009): • 328,795 smokers called quitlines to seek help in 2006 • Less than 1% of the country’s total smokers • Additional resources (e.g. funding) would help increase the number of tobacco users receive quitline services • per capita funding for quitlines in fiscal year 2006 was 22 cents and per smoker funding was $1.10 • CDC recommends $3.49 per capita funding for cessation services • Quitlines have capacity to reach 16% of the smokers annually • Utilized capacity would increase the number of smokers receiving quitline services to approximately 7 million per year • increase quit attempts, reduce relapse rates and • Increase number of quitters per year

17. Recent Economic Crisis and Tobacco USE • Current economy will prompt smokers to change their smoking habits • cut back on cigarettes or attempt to quit smoking • seek smoking cessation services • Unemployment may play a significant role in establishing smoking habit • odds of smoking among unemployed is higher (British study) • Recent federal tax increase of $0.65 per pack will reduce smoking prevalence and increase demand for cessation services • decrease demand for cigarettes by 6% • decrease smoking prevalence among youths by 18% • approximately 1.7 million total quitters

18. Recent Economic Crisis … • Continued economic recession will drive more people to Quitlines • Due to the income responsiveness of cigarette demands • If economic stimulus funds become available to states, they will be able to increase the quitlines coverage and promotions • Economic stimulus bill allocated $75 million for tobacco cessation services • Increase in availability of medications and self help materials through quitlines will increase the volume of callers • Utilize low-cost promotional strategies to counter economic crisis • Develop strong linkages with healthcare providers • Clinical interventions motivate patients to quit smoking or encourage them to call quitlines

19. Conclusion • Smoking prevalence has declined in last few decades • Declines in prevalence occurred as a result of 1964 Surgeon General’s report on smoking, which increased awareness about the health consequences of smoking • Declines in prevalence also because of the ongoing documentations of the economic consequences of smoking • Excise tax increase and tobacco control policies have also contributed to the decline • Current economic situation is an opportunity to: • prompt smokers try to quit smoking • reduce overall smoking prevalence • lower smoking initiations among youths and young adults • reduce the health and economic burden of smoking • Current economic climate is an opportunity to: • increase awareness of Quitlines and services provided • increase level of quitlines funding to expand cessation services • target populations that are disproportionately affected by smoking

20. Contact information: Bishwa Adhikari, Economist Email: bia6@cdc.gov Phone: 770-488-5718 Web: http://www.cdc.gov/tobacco