The Social Costs of Tobacco Smoking

Abstract

This article is concerned with establishing a methodology for the measurement of the social cost of tobacco consumption, and with using that methodology to estimate the relative quantitative importance of each of the identified components of social cost. It begins by defining social cost and explaining its relevance to policy making. The next section derives a matrix of items that need to be calculated if the social cost is to be correctly measured. The third section surveys the existing empirical literature on the social costs of tobacco consumption in the light of the methodology derived in this paper. In general it concludes that most measures of ‘social cost’ are incorrect. However, some interesting numbers do emerge from the studies and these are highlighted. Finally, the last section discusses the policy relevance of actual and potential measures of social cost and concludes with some general observations on the direction of future research in this field.