Costs of Smoking

Readers Question: why is smoking an external cost?

An external cost occurs when consuming or producing a good causes a harmful effect to a third party.

When you smoke a cigarettte there are certain private costs

• Increased risks of heart attack
• Increased breathlessness /emphysema
• Increased risk of Lung Cancer
• Cost of buying the cigarettes

The external costs of smoking include:

• Cost to NHS (and hence taxpayer) of treating smoking related illnesses. It is estimated to cost NHS between £1.4bn and £1.7bn (link BBC)
• About 50 million working days are lost as a result of smoking-related illnesses. This leads to lower productivity for the economy
• Cost of litter. Smoking is biggest single cause of litter in UK.
• Passive smoking to others. Smoking in enclosed areas can increase risk of cancer to others who are not smoking. The ban on smoking has gone a long way to reduce this external cost.

However, although there are many external costs of smoking, there is also research suggesting the external costs are less than first calculations. This is because smokers die early, saving the government pensions and health care for the elderly.

• Benefits of smoking bans in UK
• Should tax on cigarettes be increased?
• The real cost of smoking
• Essay on banning cigarettes