What Economic Incentives Have Had the Greatest Impact on the Smoking Decline - Research Paper Example

Smoking has declined significantly in Australia over recent decades. What economic incentives have had the greatest impact on this decline? Introduction: Every year cigarette smoking kills above five million people throughout the world. Out of the five million people, fifty percent of them includes the employed group of individuals whose age ranges between 35 to 69 years. Lung cancer has been considered as the most well known outcome of smoking. Nearly equal number of lives is lost due to cardiovascular disease. According to the World Health Organization, the number of smokers will be going to increase from 1.3 billion to approximately 1.7 billion in 2025. The death rate is forecasted to increase to nearly 10 million per year by 2030 due to global smoking. The use of tobacco is considered as a threat to our health and economic well being. The World Health Organization’s international Framework Convention on Tobacco Control has provided a guide for synchronized global action. However, accomplishment of this vision requires action to be undertaken by every nation. The actions include political commitment, a trained workforce and appropriate methods for collecting and evaluating data1. Attempts to reduce tax evasion, education and marketing endorsements, trainings to ensure smoke free places of work are provided to the consumers in terms of packaging. These economic incentives had led mostly to the fall in smoking in Australia. The fall in per capita consumption in tobacco in Australia: Australia’s largest avoidable cause of death and disease appears to be smoking. More than 3 million people, that is, nearly 18 percent of the Australian population who are aged between 14 and above, smoke on a regular basis2-3. Although the smoking rate has fallen over the existing decades, the risk associated with smoking continues to remain at the highest level4-5. Table 1: Expected total tobacco consumption which includes cigarettes, cigars and smoking tobacco, total and per individual equal and above 15 years of age, Australia, 1998–99 to 2004–05 Year Cigarettes including contraband cigarettes (million pieces) Cigars (million pieces) Smoking tobacco (pipe and RYO including chop-chop) (tonnes) Cigarettes, cigars and smoking tobacco, (including contraband tobacco products) (million pieces) Cigarette equivalents (including contraband tobacco products), per year per person 15 years and over (pieces) 1998-99 30,479.4 84.00 1847.0 32,437.4 2478 1999-00 29,674.5 101.3 1730.6 31,506.4 2367 2000-01 27,030.4 111.1 1510.3 28,651.9 2123 2001-02 24,700.0 108.3 1677.1 26,485.5 1936 2002-03 24,241.5 106.6 1733.3 26,081.4 1886 2003-04 25,385.5 108.8 1972.4 27,466.8 1963 2004-05 25,112.9 107.0 1940.0 27,159.9 1915 (Tobacco in Australia: Facts and Issues, n.d.) From the Table 1 it can be seen that the total number of tobacco consumption has drastically fallen over the initial few years in Australia. The drop in consumption of tobacco may be due to several reasons such as, increased quitting activity, the expansion of smoke-free policies in public places in most states and provinces, and the modification of tobacco taxes between November 1999 and February 2001. There has been adjustment in system of charging duty on per stick basis along with the imposition of the Goods and Service Tax (GST). This led to an enhancement of the increase in the price of the large cigarettes packs and reasonable increase in the price of smaller pack sizes. The sharp decline in the sales of cigarette seems to have been slightly offset by amplified use of smoking tobacco and cigars. There has been a cut in total per capita sales approximately by 20 percent. The per capita consumption seems to have declined further by only 1 percent between 2000–01 and 2004–05. Although consumption of tobacco has significantly decreased by nearly 20 percent in Australia, the noteworthy change has been observed in case of secondary school students in Australia. During the period 2002 to 2005, the number of cigarette smokers of 16 to 17 years of age, have fallen by nearly 30 percent6. Table 2 shows per capita cigarettes usage by secondary-school learners in Australia between 1984 and 2005. Per capita consumption is computed by dividing the total number of enrolled students in secondary schools where smoking surveys were performed (numerator) by an approximation of the total number of cigarettes smoked in by all students within a specified period of time (denominator) 6. Table 2. Number of cigarettes smoked by each Australian secondary-school learner every year during the period of 1984 to 2005 Year Number of secondary-school students in Australia Total numbers of Australian secondary-school students who report smoking in the last week, 12-to-17-year-olds Average reported cigarette consumption, among secondary-school students who smoke at least weekly Reported total number of cigarettes smoked each week by secondary-school students who smoke at least weekly Estimated number of cigarettes smoked each year per Australian secondary-school student 1984 1,225,371 278,227 27 7,142,072 303 1987 1,263,582 221,871 28 5,983,320 246 1990 1,229,973 235,831 28 6,411,582 271 1993 1,228,343 261,981 26 6,679,791 283 1996 1,250,695 276,740 26 7,059,647 294 1999 1,296,884 268,919 25 6,636,501 266 2002 1,322,437 205,517 26 5,380,957 212 2005 1,367,668 140,359 23 3,211,698 122 (Tobacco in Australia: Facts and Issues, n.d.) From the above table, it can be viewed that per capita cigarette consumption among the secondary students have fallen dramatically in Australia. Figure 1. (Tobacco in Australia: Facts and Issues, n.d.) It has been estimated that there has been downfall of about 58 percent of smokers among the secondary school students in Australia from 1996 to 20056. It has been observed in Western Australia that smoking among grown-ups has decreased from 36 percent in 1974 to 23 percent in 19957. The decline in consumption of tobacco between 1984 and 1987 is due to the beginning of State Quit campaigns during this period. Again, the launch of National Tobacco Campaign in May 1997 resulted in an increase in the number of cigarettes smoked from 294 (in 1996) to 266 (in 1999) (See Figure 1.). The other reasons for the decline in the tobacco consumption include the amplification in the price of the products of tobacco in November 1999, June 2000 and February 2001. In addition, smoke-free public places were established during the time period of 2000 to 2005. Thus, from the above figure, it can be observed that the number of cigarettes smoked dropped from 212 (in 2002) to 122 (in 2005)6. Factors influencing the prevention of smoking: Youth campaigns are considered to be most effectual when it is balanced by congruent school and community-based approaches. These campaigns are supported by an inclusive tobacco control program that helps to structure an extensive non-smoking standard and attitudes. Youth campaigns normally emphasize on smoking related issues most prominent to the youth, including short-term health consequences, social image, condemnation and expenditure. Revelation of the skullduggery of the tobacco industry is another subject matter that has been applied in youth anti-tobacco campaigns. There has been fluctuation in targeting the youths in the context of efficiency of anti-smoking media campaigns. The variation occurs due to certain factors such as, the quality, substance and reach of messages from the media, the absence of complementary approaches, poor assessment method, disagreement with other community and the impact of media and tobacco industry. Media messages also need to be responsive to the developmental phases of youngsters, and to admit that the factors influencing males and female adolescents may vary. In Australia, television advertising has been tremendously effectual in raising consciousness of the health consequences of smoking among less educated groups. Numerical statistics from the International Tobacco Control Survey conducted by four nations portrays that over 90 percent of individuals have watched promotions of smoking on television. It has also been seen that there are no changes in level of consciousness between groups8. Other alternatives to maximize the effect of mass media’s smoking deterrence campaigns include footing them on sound hypothetical concepts. Values of communal marketing, message expansion based on sound influential research are also different options to increase the impact of mass media9. School-based interferences have been the conventional cornerstone of attempts to prevent the acceptance of health-compromising behaviors by young individuals, including smoking. The school-based programs have insignificant or no effect on the society which are not supported by all-inclusive community programs and strategies. Prohibitions on smoking in schools need to be thoroughly enforced so as to put a check on adolescent smoking rates. In Australia, most of the states and provinces have had smoke-free school campuses under workplace laws since 1988. Western Australias Department of Education and Training only expanded its policy to all outside regions in 2005, and the Northern Territory still permits smoking in selected areas within the school premises under the stipulation that it is out of the youngsters’ sight. In Victoria, the Smoke-free Schools – Tobacco Prevention and Management Guidelines suggest that educational institutions function as non-smoking environment10. One of the effective programs to minimize smoking is to decrease the access to tobacco among the young generations. It is illegal to sell tobacco to the youngsters who are under the age of 18 in Australia. However, the national data reveals that it is normal for the young smokers to purchase their own cigarettes. In 2005, it has been observed that about 23 percent of secondary students aged between 12 to 17 years were current smokers. They have been seen to purchase their individual cigarettes. Nearly 17 percent of smokers (aged between 12 and 15) had purchased their own cigarettes, and roughly 29 percent of teenagers aged within 16-17 years used to purchase cigarettes on their own. Data exhibits that male smokers were more liable to buy cigarettes for themselves than female smokers11. Figures show that about 16 percent of regular smokers having an age between 12 and 17 took the help of others to buy cigarettes for them. Generally, youngsters used to ask for help from the friends who are above 18 years of age and others seek help from the strangers to buy cigarettes. Similar kind of survey displays that nearly 44 percent of current smokers aged between 12 and 17 believed that it would not be hard enough to purchase their cigarettes. On the other hand, about 80 percent considered that it would very easy for the others to buy them their cigarettes. Since 1987, the general proportion of current smokers aged between 12-17 years purchasing their own cigarettes, have fallen. However, the fraction of smokers has continued to remain stable for the age group ranging between 12 to 15 years since 199912. Packaging of cigarettes has the influence over the youngsters and children. In this way, the demand for cigarettes increases. The manner in which the cigarettes are packaged can also improve their appeal to children and youngsters. Discouraging the visual appeal of tobacco to youngsters has also been one of the strong precipitants for health caution labeling, graphic health admonitions and encouragement for generic packaging13. Enhancement and reinforcement of youth prevention are undertaken by adopting certain strategies that de-normalise the way in which smoking is depicted in the broader society. Prohibitions on smoking in restaurants and bars may also have a considerable outcome on juvenile smoking behavior. Prohibitions of this nature not only facilitate de-normalisation of the behavior, but limit chances for smoking. According to a study conducted in Boston, adolescents are considerably less likely to advance from experimentation with smoking to set up smoking trends where absolute bans on smoking in restaurants are implemented. Although restaurant bans are enforced since more than two years, youngsters aged between 12 and 17 years had only 10 percent risk of becoming recognized smokers compared to youngsters living with weak smoking limitations in restaurants. No considerable distinction has been observed among the youngsters between the rates of development of smoking in regions where smoking constraints were weak or medium. The growing trend in Australia in the direction of smoke-free pubs, nightclubs and other entertainment sites is also probable to add towards rising denormalisation of smoking. Other research has verified that the reverse also applies, reporting that more often youngsters find smoking taking place in their surroundings, the more likely they are to have the opinion that smoking is both publicly acceptable and usual. Smoking limitations in public zones also help cut smoke intake among teenagers. However are less influential than prohibitions or limitations on smoking in the home. Research has exhibited that providing frivolous after-school activities and sites where toddlers and teenagers can mingle under adult supervision, may result in a modest but important decline in smoking rates within these group of individuals. The tobacco industry considers denormalisation of smoking activities as a noteworthy threat to its long-term feasibility14. The help of manipulation of taxes and other imposts (a kind of additional tax) can raise the prices of the tobacco products. This is considered to be a key plank of an inclusive tobacco control policy. It is identified so as to decrease smoking rates among young smokers. The idea is that the youngsters are mainly responsive to prices of cigarettes, given their comparatively low disposable income. It implies that the demand for cigarettes is price inelastic. Whatever may be the price of cigarettes, say, very expensive, it does not necessarily affect the rates of trials among the young generation. Basically, the teenagers do not purchase their own cigarettes. They acquire them from their friends, family and other different sources. The price of tobacco tends to increase more as the intensity of smoking enhances. This occurs because dedicated smokers are more likely to buy their own cigarettes. It is thus likely that increase in the price of cigarettes has the greatest effect among younger smokers when they are balanced between seldom and habitual smoking. Effectual taxation policy needs to guarantee that enhancements in the price of tobacco are real to sustain the effect. Optimally, the price of tobacco products is frequently enhanced through taxation, in proportion to the cost of living15. As the youngsters are occasional smokers rather than regular smokers, it is predicted that they are less affected by the changes in the price of tobacco. However, as the teenagers and the adolescents usually have low earrings and less reliant on tobacco, this made them to be more prices sensitive. According to studies conducted by researchers, significant inverse relationship has been found between sensitivity of price and the age groups. The young smokers tend to reduce their consumption of cigarettes much more than the grown-ups as the price of cigarettes increases16. Impact of the increase in price of tobacco: Figure 2 and 3 portray that the accounted figures of cigarettes smoked per secondary-school learner in Australia enhanced between 1990 and 1996 in proportion to rise in affordability. It fell between 1996 and 1999 in spite of a small augmentation in affordability. It then declined even more considerably between 1999 and 2005 corresponding to a further crash in affordability. The probable cause of this decline is due to decrease in the number of young individuals smoking instead of fall in consumption17. Figure 2. Source: Tobacco in Australia: Facts and Issues, n.d. Figure 3. Source: Tobacco in Australia: Facts and Issues, n.d. Figure 4. Source: Tobacco in Australia: Facts and Issues, n.d. From the above figure, it appears that that the sharp increases in price in November 1999, June 2000 and February 2001 developed from tobacco tax reforms were the largest contributors to the spectacular drop in per capita consumption of tobacco products during the time period of 1999–00 and 2000–05. The number of cigarettes sold officially in 2001–02 was approximately 17.5 percent of the total number of cigarettes sold. This figure is less than the number of cigarettes sold legally in 1998–9917-18. By observing Figure 4, we can find that the affordable cigarettes equal and above 15 years of age declines from 2130 (in 1998) to 1550 (in 2006). The economic underlying principle behind the tobacco control: According to the economic theory, the consumers know what is best for them. This theory is known as consumer’s sovereignty. It has been hypothesized that the best way to allocate scarce resources in a society is to permit the consumers to choose from a range of goods and services within a free, competitive market. According to this economic structure, if smokers are allowed to freely and willingly consume tobacco with complete knowledge of the market, then the market would operate in an efficient way. Thus, it would lead to less intervention of the government. Economists point out to three market failures due to less intervention of the government. One is the information failure about the health hazards of smoking, breakdown due to the addictiveness of smoking and finally and the external costs (social costs or externalities) of smoking19. Conclusions and recommendations: In response to imperfect information, governments can offer mass education and communal marketing campaigns. These can permit health caution labels on cigarette packaging and information at point of sale20. They can also provide the finance for effective framing and delivering of health information. In response to addiction to tobacco-delivered nicotine among grown-ups, governments can provide fund for the expansion and delivery of education materials and courses. They can provide adequate encouragement to the health care providers to make the best possible use of the suitable therapies and services. The government can also opt for enhancement in the tax structure to make the cigarettes less affordable among the young generations. Bans on sale of tobacco products to the minors can be put into effect by the government. Regulations should be made so as to make the cigarettes less appealing to the children. To address the entire sum of externalities attributable to smoking and in general failure in the tobacco market, governments can take on a wide-ranging tobacco control policy including: enhancements in taxes on tobacco products and accomplishments to reduce tax avoidance, education and communal marketing promotions, instructions to ensure smoke free workplaces, hospitality sites and public transport, services to provide support to smokers who want to give up smoking, subsidies to therapies for treating tobacco dependency; and guideline about the performance and packaging of products and the information that must be offered to consumers within the package 19. References: 1. “ACCC – Response to Senate Motion 1031”. Sept. 24, 2001. Available at: http://wopared.aph.gov.au/senate/committee/clac_ctte/completed_inquiries/2002-04/tob_adv_proh/submissions/sub4.pdf (Accessed on Oct. 6, 2009). 2. “Are current strategies to discourage smoking in Australia inequitable?” Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-9-disadvantage/9-8-are-current-strategies-to-discourage-smoking-i (Accessed on Oct. 5, 2009). 3. “Best estimate of recent tobacco consumption in Australia”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-2-consumption/2-9-best-estimate-of-recent-tobacco-consumption-in (Accessed on Oct. 5, 2009). 4. Clarkson, JP, Donovan RJ, Jamrozik, K, Sydney-Smith, K, Frizzell, S. “Smarter than smoking – Evaluation of a campaign to reduce teenage smoking in Western Australia”. n.d. Available at: http://www.aes.asn.au/conferences/1999/Clarkson%20_2_%20LS.pdf (Accessed on Oct. 6, 2009). 5. “Denormalising Smoking”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-5-uptake/5-29-denormalising-smoking (Accessed on Oct. 5, 2009). 6. “Foreword”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/foreword (Accessed on Oct. 5, 2009). 7. “Impact of price increases on tobacco consumption in Australia”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-13-taxation/13-5-impact-of-price-increases-on-tobacco-consumpt (Accessed on Oct. 6, 2009). 8. “Introduction: The big picture”. n.d. Available at: http://www.preventativehealth.org.au/internet/preventativehealth/publishing.nsf/Content/96CAC56D5328E3D0CA2574DD0081E5C0/$File/tobacco-1.pdf. (Accessed on Oct. 6, 2009). 9. “Mass media strategies/campaigns”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-5-uptake/5-21-mass-media-strategies-campaigns (Accessed on Oct. 5, 2009). 10. Mc Carthy, M, Abbott, J, Durkin, S, Wakefield, M, Germain, D. “Smoking prevalence and consumption in Victoria: key findings from the 1998–2008 population surveys”. Centre for Behavioural Research in Cancer. n.d. Available at: http://www.cancervic.org.au/downloads/cbrc_research_papers/rps39_SmokingPrevalenceConsumptionVic_correct_2006_weight.pdf (Accessed on Oct. 6, 2009). 11. “Price elasticity of demand for tobacco products”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-13-taxation/13-1-price-elasticity-of-demand-for-tobacco-produc (Accessed on Oct. 6, 2009). 12. “Quality Care Products and resources”. RACGP. n.d. Available at: http://www.racgp.org.au/Content/NavigationMenu/About/Governance/NationalStandingCommittees/NSCQualityCare/200905QualityCareProducts.pdf (Accessed on Oct. 6, 2009). 13. “Reducing product appeal”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-5-uptake/5-27-reducing-product-appeal (Accessed on Oct. 5, 2009). 14. “Reducing tobacco access and supply”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-5-uptake/5-26-reducing-tobacco-access-and-supply (Accessed on Oct. 5, 2009). 15. “Reducing Tobacco Use”. Planning for Healthy Communities. n.d. Available at: http://www.health.vic.gov.au/healthpromotion/downloads/ch_9.pdf (Accessed on Oct. 6, 2009). 16. “School-based interventions”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-5-uptake/5-23-school-based-interventions (Accessed on Oct. 5, 2009). 17. “Taxation and pricing of tobacco products”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-5-uptake/5-30-taxation-and-pricing-of-tobacco-products (Accessed on Oct. 5, 2009). 18. “The economic rationale for intervention in the tobacco market”. Tobacco in Australia: Facts and Issues. n.d. Available at: http://www.tobaccoinaustralia.org.au/chapter-17-economics/17-1-the-economic-rationale-for-intervention-in-th (Accessed on Oct. 6, 2009). 19. “Tobacco Smoking”. n.d. Available at: http://aihw.gov.au/publications/phe/ihrftav/ihrftav-03.pdf (Accessed on Oct. 6, 2009). 20. Victoria, A. “Better Health for Men”. Sept. 2007. Available at: http://www.amavic.com.au/icms_docs/19867_Better_Health_for_Men.pdf (Accessed on Oct. 6, 2009). Read More