The usual clueless complaints about spending on anti-smoking

Does anyone recall any articles about proposed or actual government anti-smoking spending that did not follow the same script as the recent ones (NYT, PressConnects) that complained about U.S. state government spending?

Reported spending on anti-smoking programs was $X (it does not matter what X is) and the anti-smoking activists complain that this is far less than the governments collect in sales taxes and MSA money, implying that somehow they are entitled to the full take. Sometime they even claim, contrary to all evidence, that if they were “fully funded” then they could work miracles.

(Part of the propaganda is that the Master Settlement Agreement payments come from the manufacturers, but it is effectively an additional national sales tax, arguably created in violation of constitutional rules about who can impose taxes, but that is a different story.)

Do the anti-tobacco extremists really think that nothing else government spends money on has any benefit, and thus there is no reason to spend money on anything other than their projects?

I recognize that they seldom seem to have sensible policy analysis in their repertoire — witness how often one of them writes, in effect, “this small study looked at one chemicals analysis (or maybe health endpoint) in isolation, without any consideration of the big picture or any mention of economics, benefits, policy, etc., and based on these results we conclude that the entire world should change public policy regarding nicotine products as follows….”

(For readers interested in an illustration of this phenomenon, the best recent example is the study of PAHs in smokeless tobacco by the anti-THR group at the University of Minnesota. This was a single non-replicated study of limited scope that did not even address human health outcomes, let alone offer any cost-benefit analysis of manufacturing changes. Yet the authors breathlessly concluded that, “Urgent measures are required from the U.S. tobacco industry to modify manufacturing processes”. This policy declaration would still be absurd – completely unsupported by the study results and delving into realms beyond the authors’ apparent expertise — even absent the fact, as Brad Rodu reported in detail,, that the study found levels of chemicals that were so low that any potential health risks lie between trivial and none.)

But even given the behavior of the extremists, you would think that a news reporter would occasionally stumble upon someone to interview about this whose education included one course on law and economics or applied micro, and thus could explain that there is absolutely no reason to expect that the optimal amount to spend on smoking cessation bears any relation to what is collected in cigarette taxes. The most obvious reason for this conclusion is that U.S. states and other governments are taxing the heck out of smokers for the purpose of making ends meet because it is the one tax increase that they can usually get away with without complaint. So of course not all of the revenue is going to anti-smoking – that was never what the taxes were designed for.

But even if the taxes were entirely based on the goal of discouraging smoking, rather than just seeing smokers as a convenient ATM, there would still be no reason to expect that spending it all on anti-smoking would be useful. A simple analogy is that some governments put deposits on soda bottles, batteries, and other objects to increase the chance that they are recycled rather than littered. But whatever the government might net from this (because not all the bottles are returned and the government can choose to claim the balance for itself rather than letting merchants keep it) is not necessarily the right amount to spend on anti-littering campaigns. This is obviously the case since some jurisdictions collect a lot of money this way while some collect none at all — which is, of course, similar for cigarette taxes. An even simpler illustration: If a government collected no money because it did not impose bottle fees or cigarette taxes, would that mean that the optimal level of spending on anti-littering or anti-smoking would be zero? Obviously not.

So what determines the right amount to spend?

Anti-smoking efforts, like all government projects, should be funded until the value the next dollar produces is as high as the value that would come from the next dollar of spending on education, roads, police, social services, and whatever else competes for scarce resources. Spending more than that lowers overall social welfare by taking away from a better use of the money.

So what about the marginal product of a dollar spent on anti-smoking?

It is quite difficult to assess, which is probably why those who want that money can get away with saying “gimme more, more, more!”, but my guess is that a careful analysis would reveal is that an extra dollar on top of the billions already spent produces approximately nothing. It might be that the first few hundred million spent on the most useful targets is helping hundreds of thousands of people a year become nonsmokers. (It might also be that even this slice of the budget accomplishes almost nothing because social forces and common knowledge so dominate smoking behavior – we cannot really know because the assessments of the effectiveness of interventions are generally pretty useless.) But beyond some expenditure, there are clearly severely diminishing returns.

Evidence for this is patent: There is so much spent on silly advertising, pointless research, and barely-useful cessation aids that we clearly have run out of ways to spend the money on high-payoff anti-smoking efforts. If activists who call for bigger budgets have such good ideas about how to spend more money on new projects, why are they not redirecting the portion of the first couple of billion per year that is clearly wasted?

Meanwhile, the U.S. states are in a nasty financial situation, with difficulty paying for schools and other basic services. It is a reminder of the egocentrism (i.e., inability to recognize that other people have different viewpoints or preferences) of the anti-tobacco extremists that they do not seem to care that meeting their demands might well mean that someone goes hungry. Just to keep things in perspective, I should note that the net social damage done by overspending on smoking cessation in the U.S. is trivial compared to the Framework Convention on Tobacco Control demanding that countries with health budgets of a few dollars per person-year devote substantial resources to anti-smoking efforts. If poor countries keep the promises they were arm-twisted into making, the social costs will be enormous. This should clearly illustrate that calling for more spending on anti-smoking eventually becomes grossly unethical. The Framework Convention demands are so extreme in trying to direct public money away from where it is desperately needed and giving it to one special interest group as to nearly fit the definition of embezzling or at least major corruption.

The issue of diminishing marginal benefit reminds me of the same principle manifesting in a different way: When I first started doing research in public health, in the mid-1990s, I was quite interested in trying to help reduce the health burden from smoking. But after observing how many people were working in that area and what they were doing, it became apparent to me that the marginal contribution was basically useless, and that the area was (already back then!) grossly overpopulated. Thus, though the issue was the biggest public health issue in rich nations all totaled, the marginal contribution another researcher (like another million dollars) could make was quite small. So I decided to focus my attention elsewhere.

Of course, if I had been more open minded at the time and looked past the orthodox discourse, I might have found the THR work of Rodu and a few others and realized there was an under-populated and potentially valuable area to work on. I only discovered that half a decade later and by accident. (I try to remind myself of that now and again when I get frustrated with people who are genuinely interested in promoting public health but are tricked by the anti-tobacco extremists’ rhetoric into believing that harm reduction is not a good option.) This story does suggest that there may be a few approaches to reducing the health risks from smoking that are indeed underfunded — like, say, harm reduction. Total government and NGO spending on researching and promoting THR is a small fraction of 1% of the total anti-smoking budget (and most of that depends on industry grants). Of course it does not seem terribly likely that the activists clamoring for more state spending want any of it directed to THR since both they and the states have a history of wanting to just do more of what they have been doing even though the marginal value has diminished to zero.

-Carl V. Phillips

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