Friday 14 October 2011

Mutant smoking statistics [updated]

TVNZ reports:
Australia's Cancer Council said the Senate should end the political delays and get on with passing the legislation, with authorities estimating smoking now kills 15,000 Australians each year and costs the health system $32 billion.
Oh please. What's the source on the $32 billion? Almost certainly Collins & Lapsley, who found that the total costs of smoking in Australia were $32 billion. How much of that $32 billion was health? $318.4 million. Is that much much less than the aggregate tobacco excise tax take? Certainly. I'm just going to copy Collins & Lapsley's tables here.
Here we have tangible costs divvied up by category (intangible costs of premature death and the like make up the bulk of the purported costs of tobacco and aren't in this table). Note that we've disputed the alcohol figures rather strongly. But what do we see? By C&L's figures, tobacco costs the Australian health system $318.4 million. That's somewhat less than the figure claimed by the Australian Cancer Council, assuming that they're quoted correctly [Update: see below]. Two orders of magnitude less. The costs to the health system are ONE PERCENT of the costs cited by TVNZ.

As for overall costs to the country, here's Collins and Lapsley again:

So tobacco leaves the Australian federal government up $2.7 billion and state governments up $833 million.

But the Australian Cancer Council gets to build support for beating on tobacco by helping to make folks think that smoking costs the health system $32 billion, again assuming that they've been correctly cited or that I've not missed their post clarifying that they'd been mis-cited. [Update: see below.]

And, this isn't the first time that the total C&L tobacco cost figure has been cited as a cost to the health care system; here's Chris Snowdon fisking a May story from The Age.

I wish TVNZ would check its sources from time to time. But, they've provided my nomination for Stat of the Week.

Update: Paul Grogan of the Australian Cancer Council emails noting that they're not the source of the $32b figure: "I am not aware of any Cancer Council Australia document that claims tobacco costs $32b in annual healthcare costs." Excellent news. The TVNZ / Reuters story linked then either is misleading or misquotes and ought to be updated. I trust that the Cancer Council will soon be issuing notice to Reuters that the annual health care costs of smoking are one percent of the figure Reuters quoted. They might also note the billions in tobacco excise tax revenues that swamp any fiscal cost smokers impose on the health care system.


  1. What an amazing ignorance in the cancer industry! Smoking delivers a huge benefit to society. I found some studies on the economy of smoking & health here:

    Economic studies: The costs of smoking

    Also take a look at this from the Czech Health Ministry in August 2011:

    Minister: Smokers' treatment costs one tenth of taxes

  2. Yeah !! I agree with the statistical report and its true in all its extent that people are dying due to cancer and the major reason behind it is the over use of tobacco !!

  3. Eric: Economists never argued that smoking doesn't kill smokers; the point of dispute is the extent and incidence of costs.