Document Type
Article
Publication Title
Journal of Law and Economics
Publication Date
1999
ISSN
0022-2186
Page Number
575
Keywords
smoking, health aspects, products liability, tobacco industry, cigarette industry, health insurance, medical care
Disciplines
Health Law and Policy | Insurance Law | Law
Abstract
The estimated health risks from smoking have significant external financial consequences for society. Studies at the national level indicate that cigarettes are self-financing since external costs such as those due to illnesses are offset by cost savings associated with premature death, chiefly pension costs. This paper extends this analysis to all 50 states and considers the costs considered in the state attorneys general suits against the cigarette industry. Cigarettes are always self-financing from the standpoint of costs to each state. The extent of the cost savings is less than at the federal level. However, smokers' higher medical costs are outweighed by reduced nursing home expenditures, lower pension costs, and excise taxes, where each of these factors alone usually exceeds the medical cost effect.
Recommended Citation
W. Kip Viscusi,
The Governmental Composition of the Insurance Costs of Smoking, 42 Journal of Law and Economics. 575
(1999)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/128