IDEAS home Printed from https://ideas.repec.org/p/cdl/ctcres/qt6j03515p.html
   My bibliography  Save this paper

Predicted Effect of California Tobacco Control Funding on Smoking Prevalence, Cigarette Consumption, and Healthcare Costs, 2012-2016

Author

Listed:
  • Lightwood, James
  • Glantz, Stanton A.

Abstract

This report contains the results of a new model of the effect of the California tobacco control program on smoking behavior and healthcare expenditure, and forecasts four alternative funding scenarios for the California tobacco control program. We use time series regression analysis of aggregate data on tobacco control program funding, smoking behavior and health care expenditures in California compared to control states. The estimates measure the difference in smoking behavior and health care expenditures between California and the control states that can be attributed to differences in tobacco control funding. We use two different estimation methods to check the analysis and find that both produce almost identical results. If the current funding levels are continued at 5 cents per pack (established by 1988’s Proposition 99), the baseline scenario, then California smoking prevalence will stop declining increase from 12.9% to 13.3% between 2012 and 2016 and cigarette consumption per smoker will increase from 233 to 253 packs per year from 2012 to 2016. By 2016, prevalence and consumption per smoker would increase by 9% and 14% from the level in 2011, respectively. The contribution of smoking to healthcare costs in California will also begin to increase. Cutting the funding level by half would to 2.5 cents per pack initially result in $39 million less in cumulative tobacco control spending per year. This reduction in spending will result in an increase in both prevalence and cigarettes consumed per smoker. Prevalence rises from about 13% to 13.5% from 2012 to 2016 and cigarette consumption per smoker increases from 235 to 261 packs per year.By 2016, prevalence and consumption per smoker would increase by 10% and 17% from the level in 2011, respectively. Compared to the baseline scenario, there would be 134 million more packs of cigarettes sold (worth $508 million the tobacco industry in pre-tax sales) and a cumulative increase in total California healthcare costs between 2012 and 2016 would be $2.2 billion. An increase in funding by $0.20 per pack (to a total of $0.25 per pack) from the $1.00 tobacco tax increase (i.e., the proposed California Cancer Research Act initiative) would restore the decline in current smoking prevalence and cigarette consumption per smoker. Prevalence would decrease from about 11.2% to 10.9% between 2012 and 2016 and cigarette consumption per smoker would decrease from 199 to 189 cigarettes per year. By 2016, prevalence and consumption per smoker would decrease by 11% and 15% from the level in 2011, respectively. Compared to the baseline scenario, a total of 1.6 billion fewer packs of cigarettes would be smoked (worth $7.2 billion in pre-tax sales to the tobacco industry) and total healthcare costs would be reduced by $28.2 billion. An increase in per capita funding to the level recommended by the US Centers for Disease Control and Prevention (CDC)Best Practicesfor California ($12.12 per capita, or 56 cents per pack), would initiate a rapid decline in smoking prevalence and a drop in consumption. Doing so would require increasing annual funding for the California Tobacco Control Program from $77.8 million in 2009 to a about $481 million per year. Smoking prevalence would decrease from about 12% to 11.1% between 2012 and 2016 and cigarette consumption per smoker would decrease from 210 to 139 packs per year. By 2016, prevalence and consumption per smoker would decrease by10 % and 38% from the level in 2011, respectively. Compared to the baseline scenario, total cigarette consumption would fall by 1.7 billion packs (worth $6.5 billion in pre-tax sales to the tobacco industry) and reduce cumulative total healthcare costs by $31.6 billion. Table. Changes in current smoking prevalence and consumption per smoker, California healthcare costs and tobacco industry revenues between 2011 and 2016 under four scenarios Scenario Percent change between 2011 and 2016 Change in California Health Care Costs Change in Tobacco Industry Sales Prevalence Consumption per Smoker 1. Status quo (baseline): $0.05 per pack +9% +14% Baseline Baseline 2. Cut program in half: $0.025 per pack +10% +17% + $2.2 billion +$0.5 billion 3. Enact Calif Cancer Res Act: $0.25 per pack and $1 tax increase -11% -15% -$28.2 billion -$7.2 billion 4. CDC recommended funding: $12.12 per capita ($0.056 per pack) -10% -38% -$31.6 billion -$6.5 billion NOTE: See Addendum at the end of this report for updated values for these estimates. The forecast results indicate that if the current level of California tobacco control funding continues at the current 5 cents per pack, then smoking prevalence and consumption per smoker will slowly start to increase over time and estimated healthcare savings due to the reduction in smoking in California will be gradually eroded. In order to continue progress in reducing harmful smoking behaviors in California, per capita funding for tobacco control programs should be substantially increased. Increasing per capita funding with a $1 excise tax increase as proposed in the California Cancer Research Act that devotes an additional $0.20 per pack sold or increasing per capita funding to the level recommended for California by the CDC would reduce smoking behavior at rates similar to those seen in earlier years of the California program, together with the attendant large reductions in healthcare costs that the California Tobacco Control Program created.

Suggested Citation

  • Lightwood, James & Glantz, Stanton A., 2011. "Predicted Effect of California Tobacco Control Funding on Smoking Prevalence, Cigarette Consumption, and Healthcare Costs, 2012-2016," University of California at San Francisco, Center for Tobacco Control Research and Education qt6j03515p, Center for Tobacco Control Research and Education, UC San Francisco.
  • Handle: RePEc:cdl:ctcres:qt6j03515p
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/6j03515p.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lightwood, James & Glantz, Stanton, 2011. "Effect of the Arizona tobacco control program on cigarette consumption and healthcare expenditures," Social Science & Medicine, Elsevier, vol. 72(2), pages 166-172, January.
    2. Ekaterini Panopoulou & Nicolaos Kourogenis & Nikitas Pittis, 2006. "Irrelevant but highly persistent instruments in stationary regressions with endogenous variables containing near-to-unit roots," Economics Department Working Paper Series n1620106.pdf, Department of Economics, National University of Ireland - Maynooth.
    3. Kevin D. Hoover & Soren Johansen & Katarina Juselius, 2008. "Allowing the Data to Speak Freely: The Macroeconometrics of the Cointegrated Vector Autoregression," American Economic Review, American Economic Association, vol. 98(2), pages 251-255, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pierre Lafourcade & Joris de Wind, 2012. "Taking Trends Seriously in DSGE Models: An Application to the Dutch Economy," DNB Working Papers 345, Netherlands Central Bank, Research Department.
    2. María Lorena Marí Del Cristo & Marta Gómez-Puig, 2013. "Fiscal dynamics in a dollarized, oil-exporting country: Ecuador," Working Papers 13-06, Asociación Española de Economía y Finanzas Internacionales.
    3. Katarina Juselius, 2022. "A Theory-Consistent CVAR Scenario for a Monetary Model with Forward-Looking Expectations," Econometrics, MDPI, vol. 10(2), pages 1-15, April.
    4. Ingrid Groessl & Artur Tarassow, 2015. "A Microfounded Model of Money Demand Under Uncertainty, and some Empirical Evidence," Macroeconomics and Finance Series 201504, University of Hamburg, Department of Socioeconomics, revised Jan 2018.
    5. Kadow, Alexander & Cerrato, Mario & MacDonald, Ronald & Straetmans, Stefan, 2013. "Does the euro dominate Central and Eastern European money markets?," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 700-718.
    6. Katarina Juselius & Niels Framroze Møller & Finn Tarp, 2014. "The Long-Run Impact of Foreign Aid in 36 African Countries: Insights from Multivariate Time Series Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(2), pages 153-184, April.
    7. Roy Thurik, 2014. "Entrepreneurship and the business cycle," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-90, October.
    8. Durevall, Dick, 2017. "Cost Pass-Through in the Swedish Coffee Market," HUI Working Papers 120, HUI Research.
    9. Kevin Hoover & Katarina Juselius, 2012. "Experiments, Passive Observation and Scenario Analysis: Trygve Haavelmo and the Cointegrated Vector Autoregression," Discussion Papers 12-16, University of Copenhagen. Department of Economics.
    10. Colander, David C., 2009. "Economists, incentives, judgment, and the European CVAR approach to macroeconometrics," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-21.
    11. Niels Framroze Møller, 2019. "Decoding unemployment persistence: an econometric framework for identifying and comparing the sources of persistence with an application to UK macrodata," Empirical Economics, Springer, vol. 56(5), pages 1489-1514, May.
    12. Giuliana Passamani, 2008. "The process of convergence towards the euro for the Visegrad-4 countries," Department of Economics Working Papers 0825, Department of Economics, University of Trento, Italia.
    13. Ansgar Belke & Marcel Wiedmann, 2018. "Dissecting long-run and short-run causalities between monetary policy and stock prices," International Economics and Economic Policy, Springer, vol. 15(4), pages 761-786, October.
    14. Hlompo Maruping & Itumeleng Mongale, 2016. "The Real Influences Of Oil Price Changes On The Growth Of Real Gdp: The Case Of South Africa," Proceedings of International Academic Conferences 3305561, International Institute of Social and Economic Sciences.
    15. Jose L. Diaz‐Sanchez & Abrams M. E. Tagem & Joana Mota, 2022. "Tax revenue effort and aid in fragile states: The case of Comoros," South African Journal of Economics, Economic Society of South Africa, vol. 90(2), pages 175-195, June.
    16. Katarina Juselius, 2011. "On the Role of Theory and Evidence in Macroeconomics," Chapters, in: John B. Davis & D. Wade Hands (ed.), The Elgar Companion to Recent Economic Methodology, chapter 17, Edward Elgar Publishing.
    17. Fakhri J. Hasanov & Moayad H. Al Rasasi & Salah S. Alsayaary & Ziyadh Alfawzan, 2022. "Money demand under a fixed exchange rate regime: the case of Saudi Arabia," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 385-411, December.
    18. Mallory Mindy & Lence Sergio H., 2012. "Testing for Cointegration in the Presence of Moving Average Errors," Journal of Time Series Econometrics, De Gruyter, vol. 4(2), pages 1-68, November.
    19. Takamitsu Kurita, 2019. "A Recursive Monte Carlo Study of Structural-Break Sensitivity of Adjustment Coefficients in Cointegrated VAR Systems," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(2), pages 251-270, June.
    20. Filip, Ondrej & Janda, Karel & Kristoufek, Ladislav & Zilberman, David, 2019. "Food versus fuel: An updated and expanded evidence," Energy Economics, Elsevier, vol. 82(C), pages 152-166.

    More about this item

    Keywords

    Social and Behavioral Sciences;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:ctcres:qt6j03515p. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://escholarship.org/uc/ctcre/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.