Sunday Science Lesson: Some basic economics of tobacco use

by Carl V Phillips

Yesterday I pointed out how out of touch the tobacco control industry, and “public health” people in general, are with respect to basic consumer economics. Today I will expand a bit on their key failure.  For more on this and its specific implications for THR, see my recent paper (which is rather longer and more detailed than a blog post, or ten, of course, but worth your time if you really want to understand this stuff; it is intended to be accessible to those with only a newspaper-reader level of familiarity with economics, and will be no more difficult than blog reading if you took an econ class or two).

Economics tells is that, in the ideal, everyone is presented with a choice of which goods to consume and they choose the combination, subject to their budget, that makes them happiest.  This is a pretty good starting point, and is fairly useful for population-level analysis, though it is clearly too idealized to provide much of a bedrock for analyzing each person’s decisions (e.g., none of us are aware of all of our choices).  But take a thin slice of that and you are on much firmer ground:  For each choice about consuming a particular good and paying the costs of doing so versus not consuming it, people choose whichever of those makes them happier.  (If you want to split hairs about the choice of words, you could elaborate “happier” into “whichever makes them better off” or “whichever makes them and those they care about better off”, but you get the idea.)

To claim otherwise — that people are making a choice that makes them worse off, all things considered, and their revealed preference somehow does not represent their true preferences — requires some strong arguments.  The tobacco control people implicitly claim otherwise, since a key bit of their subtext is that people must be worse off if they use tobacco/nicotine.  But they do not even attempt to make the necessary arguments, let alone make a legitimate case.  Indeed, the fact that they bury it in their subtext rather than making the claim explicitly is a good indication that they know they cannot really defend it.

One legitimate reason that someone’s choice might not really reflect their preferences is that they do not actually know the real costs and benefits, and if they knew the truth they would make a different choice.  This argument can certainly be made about smokers half a century ago, and perhaps some people today in highly uneducated populations (who have rather bigger problems to worry about).  Half a century ago, smokers make their decision based on a huge underestimate of the (health) costs.  But this can no longer be said about tobacco users in any educated society.  Indeed what evidence we have suggests that smokers somewhat overestimate their risk.  Smokeless tobacco users grossly overestimate their risk in most populations (with Swedes and other aficionados of snus understand the truth more often).  Casual empiricism suggests that e-cigarette users may slightly underestimate their risks as compared to a best educated guess about the real risks, but since both the popular and best scientific estimates are that the risk is low (and e-cigarette users are basically all recent ex-smokers, so they chose smoking over abstinence) this hardly seems likely to affect consumption decisions.

So the tobacco control industry has no safe haven from economics there.  Of course, they still try to vaguely insinuate that people do not understand the risks, but no one other than some of the clueless useful idiots actually makes that claim.  Indeed, most of the time when there is an insistence that more must be done to “educate young people about the risks” or whatever, it is clearly a rationalization for producing propaganda that does not actually educate, but rather is intended to create a racism- or homophobia-like irrational hatred of tobacco users and similar disdain for the products.

Failing this semi-rational explanation (that people are making a rational choice, but based on incorrect beliefs), the task becomes rather more difficult.  One argument is that people tend to discount their welfare in the far future compared to immediate gratification more than is rational (based on other measures of how the make comparisons across time).  This is a defensible argument that is made by legitimate scholars and researchers who look at risk in general, and can apply it to smoking in particular.  (There are no longer any legitimate scholars and researchers in tobacco control as far as I can tell, but this point is made by those outside that industry.)  This is possibly a legitimate argument for not believing that smokers are really making the welfare-maximizing choice, though it does not seem to apply to tobacco products like snus or e-cigarettes that have such low risk that there is very little long-term consequence.  Moreover, even to the extent that it applies, the scientific argument needs to be made, and there needs to be the additional argument that aggressive intervention is ethical based of this.

Instead of making one of the potentially legitimate arguments, tobacco control hides behind an unstated notion that the choice to use tobacco products is some sort of involuntary tic that people stumble into for no explicable reason (or perhaps because of pretty packaging) and just keep doing.  This allows them to pretend that they are not attacking a choice that people are making for some legitimate reason, and thus lets them pretend that they are attacking some inanimate force, not the people that they claim they are trying to help.  But such fictions are not without costs to those who believe them.  It is difficult to formulate effective tactics when your view of what you are dealing with departs so substantially from reality.

Bottom line:  The main reasons tobacco control consistently fails to meet its own expectations are a matter of basic economics (people make choices based on preferences) and basic warfare strategy (if you have no understanding of what motivates your enemies, you will have a difficult time defeating them via any method other than obliteration).


[…”what about addiction?” some of you are asking.  Well, what about it?  Whatever it means, does it change the basic economic principles?  Comments welcome, but more on that later…]


8 responses to “Sunday Science Lesson: Some basic economics of tobacco use

  1. Pingback: American Legacy Foundation – lying via hypothetical research methods | Anti-THR Lies and related topics

  2. “There are no longer any legitimate scholars and researchers in tobacco control as far as I can tell…..”

    I’d like to use that quote, but won’t, because it has a somewhat inflammatory content, and although I’ll take on any fight I won’t set up one for others.

    Yes, I have attacked all those corrupt liars and barking mad crackpots viciously, no doubt to your amusement, but the veracity of your remark (as much as a remark in a blog post is to be taken as deadly serious – fair enough) depends on how you define the TCI: as a group who believe a nicotine-free world is a perfect world, or alternatively as a group that consists of many of the aforementioned but also some who believe a smoke-free world is a perfect world and can admit that THR is one way of getting there.

    It looks as if increasing numbers in TC have been infected by the honesty plague; the latest is Peter Hajek – see:

    So if Etter, Britton, Hajek etc. have caught the honesty virus, must they be excluded from TC, or can they remain in as legitimate scholars and researchers (but invalidate your remark); or are they just illegitimate so-and-so’s?

    My thinking is that there are no *honest* people left in TC. The honest ones are in a sort of limbo where they have to appear to be in the industry in order to get the funding (and give presentations at TC conventions), but what they say includes too much modern thinking to classify them as core TC members any longer. They are in a kind of crossover area where the real world actually intrudes into the fantasy world of academia; maybe they don’t have enough guts to just walk away. I imagine you don’t like them and I can’t blame you.

    • Carl V Phillips

      Yeah, not really intended for quoting — and it is intentionally ill-defined in the ways you note anyway: Who are tobacco control and what is “legitimate” (your suggestion of “honest” as a more precise definition of it seems about right). It is certainly the case that someone who never notes the utter junk that is present as science in their own back yard is either unaware that it is junk or not honest enough to say anything, either of which fails the “legitimate scientist” test.

      But there is also something inherently dishonest or illegitimate about the entire concept of tobacco control as currently defined. Even the more honest of its members and fellow travelers assiduously refuse to acknowledge the benefits of use. I would say that if someone says “we should make sure that people are using tobacco only if it is of net benefit” and “we should implement only those anti-tobacco measures that benefit the public”, then they would not only be thrown out of the club but they would not really be defined as part of “tobacco control”. But unless someone is making some kind of statement like those, it is difficult to see how they could possibly be considered ethical and honest.

  3. Cal: there is a major error in your economic analysis that invalidates your presumption that tobacco harm reduction would increase the total number of users of tobacco/nicotine products. You presume that smokers smoke only for the nicotine. You ignore the impact of the predatory marketing, the habituation to the cigarette-handling ritual and the likelihood that there are yet other addictive substances in cigarette smoke. Considering those issues opens the possibility that we could promote THR while reducing the numbers of teens and other non-smokers initiating and maintaining tobacco/nicotine use. Joel

    • Carl V Phillips

      Um, no. First, it is not a presumption, it is a conclusion of the analysis. It is an assessment based on everything we know about human behavior.

      Second, my analysis does not assume (or “presume”) anything about why people want to use tobacco. The analysis requires only that people want to use these products, regardless of why. I do not even mention nicotine (except as a concession to those who do not like to call extracted nicotine products “tobacco products”, as I prefer, and thus I used the construction “tobacco/nicotine products”).

      Perhaps you are trying to say that if you make an extremely strong assumption opposite the one you are claiming I made — that people smoke entirely because of non-nicotine aspects of smoking — then that would weaken the magnitude of my conclusions. That assumption is implausible and empirically wrong, of course. But even with it, you would need to further assume that whatever it is that makes people want to smoke is the only reason anyone ever chooses any tobacco product. That might get you to “no one really wants to use tobacco”, which is kind of what you are implying. But that assumptions is not merely implausible and empirically wrong, but is completely absurd — why would people use smokeless tobacco because they like the cigarette-handling ritual???

      My analysis does not claim or depend on people liking alternative products as much as they like smoking. Thus, there could be other appealing substances in tobacco smoke that are absent from smokeless (there clearly are some that are absent from extracted nicotine, and thus e-cigarettes and NRT). All that says is that not as many more people will use tobacco (upon learning that smoke-free products are low-risk) as would start smoking if it were magically made harmless and aesthetically inoffensive. I have no idea what you mean by “predatory marketing” (how does that differ from “marketing”?), so I cannot really respond to that bit.

      Those who are intent on reducing tobacco use out of some personal pique, the extremists who wish to do so even when the products have net benefits for people (quite likely when the risks are tiny), could continue to bludgeon people into avoiding the products. They (or are you suggesting that I should refer to this collective as “you”) could theoretically do so with a success rate such that total usage dropped. That is, the number of extra people adopting low-risk products because they know they are low risk (i.e., people who would have rationally avoided smoking because it was too risky even though, but for that, they would prefer using tobacco to not using it) might be less than the number being bludgeoned into abstinence. From a practical standpoint, this seems extraordinarily unlikely. But even if it happened, the core point is that more people will use tobacco when they know it is low-risk than would have otherwise used it; this point is unaffected. It is true that the next conclusion to follow from that, that total usage will increase, is based on not expecting any sea-change in people’s interest in tobacco, caused by ANTZ activism or whatever else. That seems like a fairly safe assessment, but it theoretically could be wrong.

      I really think that all of the above is already pretty clear in my analysis. I see not even a minor error identified here, much less a major one. At most there seems to be a point of clarification, to acknowledge that the core of the analysis is ceteris paribus (which most people reading economics would probably assume, but it does not hurt to state it), and that the conclusion that the net result on the ground will be an increase is based on the expectation that there will be no huge and utterly unprecedented loss of interest in tobacco (due to ANTZ campaigns or anything else).

      As for your last line, why would “we” want to do that? Setting aside the trickier question of whether there is be a good reason for this to be one of those choices that society should impose upon children (if it were possible), why would “we” want to prevent adults from rationally choosing to use low-risk products if they find that the benefits exceed the costs? (And I am setting aside the usual question: what possible right do “we” have for doing so? I am asking why would you want to, even setting aside the question of liberty.)

      • Carl: I think we agree that Tobacco Harm Reduction (THR) is rational public policy and that governmental authorities should not mislead smokers with regard to the hazards posed by smoke-free products.

        That is currently not the case in the United States. We have mandated warnings on smokeless tobacco products that are misleading (not a safe alternative to cigarettes) or simply technically inaccurate (with regard to mouth cancer and tooth and gum disease).

        While those reasonably knowledgeable with the literature will readily admit that the smokeless products that have been on the USA market since the 1980’s pose far less risk of potentially fatal tobacco-attributable illness than cigarettes, they maintain their staunch opposition to THR (defined as informing smokers that they could substantially reduce their risk of potentially fatal tobacco attributable illness) on the basis that they believe that any such communication will substantially increase the numbers of teens who will initiate tobacco use, and, once initiated, they will then transition to cigarettes.

        It seems to me that such a scenario is unrealistic. We have a number of findings that suggest that we could add THR to our efforts to reduce tobacco-attributable illness and death that would not only not increase teen initiation of tobacco use, but would actually decrease it.

        1. We did not have a pandemic of tobacco attributable illness and death until the advent of the machine-made cigarette, (1964 statement of the US Surgeon General).

        2. We have research findings (Eisenberg 2010) that using e-cigarettes in a way that would not delivery any nicotine still satisfies the urge to smoke in about 30% of smokers.

        3. We have two recent surveys, done by anti-tobacco advocates, one in Great Britain and one in the USA that found almost no non-smokers attracted to e-cigarettes, and, in the Great Britain study that included minors, none that did so. All this was in the context of totally unregulated marketing of e-cigarettes and a clear public perception that e-cigarettes are far safer than real tobacco cigarettes.. Siegel M: Blogpost May 2013 McMillen R et al: Use of Emerging Tobacco Products in the United States. Journal of Environmental and Public Health 2012 Article ID 989474 Siegel, M Blogpost dated May 2013: ASH/UK Factsheet dated May 2013:

        By predatory marketing, I refer to marketing of tobacco products with the specific intent of attracting teens to initiate tobacco product use, knowing that selling such products to teens is against the law and while the tobacco companies

        At least for the USA scene, the power of the FDA to regulate tobacco product marketing could prevent, if sensibly done, predatory marketing as noted above for all tobacco/nicotine product, further reducing the liklihood that adding THR to our tobacco control stragegies would increase teen initiation of tobacco use or even inhibit our already very low successful quit rates.


        • Carl V Phillips

          My reply to this is necessarily disjointed, and I do not want to quote all of the previous comment and interleave, so apologies to readers who have to bounce back and forth.

          Re the motives of those who denigrate ST: I have written at length that this vaguely public spirited motivation for dishonesty — believing in a “gateway” effect — is not a compelling explanation. Anti-THR liars clearly have numerous motives, none of which make them look that good. Anyone literate enough to know that smokeless tobacco is low risk is also literate enough to know that there is no reason to expect a gateway effect. No, I don’t think there is any safe harbor for them there.

          Eisenberg 2010 is a train wreck. A version of your conclusion is probably right — that many e-cigarette users find them satisfying with far less or even no nicotine delivery — but that is based on better evidence. But so what?

          Of course e-cigarettes are currently attractive almost only to smokers. We do not need journal articles to tell us that. This is partially because they are purpose-built to substitute for smoking. But it is also because a substantial portion of people who like to use tobacco are current or recent smokers. As cohorts move through time, many would-be smokers are going to use e-cigarettes instead of ever being smokers. When they make the rational decision about whether to continue (perhaps after they age a bit), many of those who would have quit had they been smokers will not do so. At the same time, as the products become more popular, they will be noticed by those who are not merely looking for a way to quit smoking. Ex-smokers who continue to miss smoking will rationally adopt them. And some people who avoided tobacco because of the risks, but are aware they like it (or discover that when they try a friend’s e-cigarette) will start. As they continue to grow in popularity, they will not longer be effectively demonized by manipulative marketing efforts by the ANTZ (talk about “predatory”!), and so fewer people will be deterred by the engineered stigma.

          Re “predatory”: What marketing is there that is specifically intended to attract teens. I realize, of course, that this can exist. But when the ANTZ make claims about it, they usually amount to “this perfectly legal marketing that mostly reaches adults is noticed by a few teens also” — hardly the same thing. Any real examples? (And why is this any more “predatory” than, say, Apple trying to get us to shop at iTunes? In both cases, they are treating consumers as targets (prey??) whose money they are trying to get.)

          Re last para: Do you really think it is possible for FDA or anyone else to engineer social learning such that smokers figure out that smoke-free alternatives are low risk but no one else did? (setting aside whether engineering such doublethink would be ethical) How? I suspect FDA would love to know.

  4. I would like to see an example of “predatory marketing” that was allegedly created just to “attract teens,” that would not also attract grown, adult smokers. TC claimed flavors were designed to “attract teens,” too, yet the evidence shows that teens were mostly “attracted” to the “adult flavors” of regular and menthol, while e-cigarette use is showing great interest in non-tobacco/non-menthol flavors by middle-aged, adult smokers. I actually smoked the Camel flavors occasionally (I think one was vanilla and the other a citrus) but I didn’t do so very often because they were much more expensive than Marlboro Lights. I was well over 30 years old before I tried them and I got the impression that the price was definitely aimed at someone with a higher income. I considered them a luxury item for adults, not aimed at kids. I never saw anyone younger than me (or too many male smokers, for that matter) smoking the flavored cigarettes.

    Anyone who thinks that a cartoon character, exciting effects or sexy people looking cool wouldn’t be attractive to adults 25 – 50 obviously hasn’t watched “Adult Swim” on Cartoon Network, adult anime, King of the Hill, The Simpsons, Family Guy, etc., or the plethora of car commercials, alcohol commercials, tech commercials, Viagra commercials, etc., ALL of which are targeted at adults well over 21. Both my brother and my husband enjoy video games and action movies the same as their teen/early 20’s sons. Exactly when do adults stop enjoying “cool” things and tasty flavors?

    Amazingly, when I started smoking daily, there was no Joe Camel and smoking was already commonly believed to cause lung cancer and heart disease. (I tried smoking on and off in my teen years, but didn’t become a daily smoker until I was 19 and living on my own. My parents smoked briefly while I was young, but quit soon after my father was discovered to have congenital heart disease. So, from a young age, my siblings and I saw smoking as very dangerous and did not have access to cigarettes in our home, yet we all ended up smoking as adults.) And when most people my age (45) started smoking, flavored cigarettes weren’t even available. We didn’t need Joe Camel and “candy flavors” to “entice” us into smoking, so why would youth today be any different? Case in point, the steady, annual decline in youth smoking hasn’t accelerated since flavors and Joe Camel were banned. In fact, based on the data I’ve seen from the CDC from before and after flavors were banned, it seems the decline has actually slowed. The significant annual drops in smoking rates are now smaller annual drops.

    Kids don’t smoke because ads are targeted at THEM. They smoke because, like drinking alcohol, it is seen as an ADULTS-ONLY activity. “Cool kids” don’t do things targets at children, they do things shown to be for adults and are forbidden to children. Pre-teens want to be doing what teens do and teens want to be college age kids are doing. Marketing departments WISH they had the same power over their target market as peers and the next age bracket has. My sons (20 & 22 now) didn’t see me smoke as children and only found out I smoked late in their teens. I raised them to believe smoking was bad and they were shocked to find out I smoked. Shortly after they found out, I switched to using e-cigarettes. My boys did as their father and I did during college and got into the restaurant/bar industry, which has a high percentage of smokers. In spite of the fact that their mother is a proponent of THR and 4-year consumer of e-cigarettes, BOTH started smoking! And they were well aware of the significantly reduced risk and the lower costs of e-cigarettes vs. traditional cigarettes. It wasn’t until their smoking PEERS started using e-cigarettes that they both switched to “vaping.” It had nothing to do with cool ads with Stephen Dorf or Jennie McCarthy or knowledge about THR – it was seeing their PEERS using them.

    If flavors or ads have anything to do with youth smoking initiation, it’s extremely low, in my experience. Just being aware of an ad doesn’t mean that ad actually had any actual influence on your decision making, anymore than car ads initiate the desire to buy a car. It’s about creating brand loyalty and competition in the market. For example, I recently started buying Red’s apple lager, largely because the commercials made me aware of the product. They are funny and goofy and make my younger kids laugh, too. The sweet apple flavor and comical ads could be accused of targeting kids. But they certainly didn’t make me buy them when I wasn’t already at the store intending to buy some alcohol – they just influenced WHICH alcohol I was going to buy. Same thing with the flavored cigarettes. I never saw ads for them, I saw them at the store when I was already intending to buy my Marlboro Lights.

    And I have to tell you that if cigarettes were banned when I started smoking and only e-cigarettes were available, I can almost guarantee I would have bought e-cigarettes and followed the same pattern I did with smoking (because they most certainly would have been prohibited for sale to minors.) At first I would have gotten them from friends, who got them illegally, and then I would have started buying them myself as an adult. Like many kids my age, I was in a hurry to grow up and assert my independence.

    Of course, this is all anecdotal, but I’ve spoken to a LOT of smokers about this and most of them share a very similar story about their own smoking initiation. I’m sure that those in TC think they are smarter and more savvy than smokers and we were just too ignorant to realize that we were being “manipulated” by the tobacco companies. But many of us are a lot more intelligent than they realize.

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