David J Collins
Associate Professor in Economics
 Macquarie University Sydney
and
Helen M Lapsley
 Senior Lecturer in Health Economics
 University of New South Wales
 Sydney Australia
Pacific Tobacco and Health Project
 An initiative of Adventist Development and Relief Agency Australia
Funding support from AusAID Australian International Development Assistance Bureau
May 1997



During project visits to South Pacific countries over the last fifteen years, it was evident that tobacco use was a major contributor to the change in disease patterns. In order to look at economic issues in a clear and yet concise manner David Collins and Helen Lapsley produced his excellent short publication of key issues. For further information on the Pacific Tobacco or Health Project contact:

Dr Harley Stanton
Pacific Tobacco or Health Project
Locked Bag 2014
Wahroonga NSW 2076
Australia
Email: stanton@globalink.org
Fax: + 61 2 9489 0943


Preface

Smoking appears to have been introduced to the Pacific during the early trade and colonisation days. Most cultures have traditions concerning the introduction of tobacco, and in some cultures tobacco was the first loan word from English.

The situation concerning tobacco use and its present and future impact in the Pacific islands requires urgent attention. Many lifestyle changes have been adopted with improvement in health, but tobacco poses as great a challenge in the Pacific as ever.

As the more developed countries tighten their anti-smoking legislation and controls on tobacco, the Pacific can become an increasingly convenient dumping ground for the tobacco industry to market their products with potentially far reaching consequences.

The work of Collins and Lapsley will contribute to a new emphasis on health and lifestyle which is emerging in the concern for healthy islands, healthy families, healthy schools and healthy cities or villages.

It is hoped that health planners and economics ministries will review this information, and take the actions necessary to effect behaviour change on smoking in the Pacific region.

Dr Jimmy Rogers
Deputy Director General-Health
South Pacific Commission
Noumea
New Caledonia
International Fax: +687 26 38 18
Email: jimmie@spc.org.nc



Introduction

The smoking epidemic has become a matter of world-wide concern. Many individual countries are engaged in energetic public policies designed to minimise the social impact of smoking and the World Health Organisation views smoking as one of the greatest world health problems.

As many developed countries experience increasing success in reducing the prevalence of smoking, attention is turning to developing countries, many of whose public policies to combat smoking are still in their infancy. Furthermore, as cigarette markets in developed countries stagnate or even contract, there is an increasing incentive for cigarette manufacturers to expand their markets in developing countries. The Pacific Islands are no exception to this trend.

For many years the major thrust of the public discussion on smoking was medical. The discussion addressed such questions as:
Does smoking cause heart disease, cancer and various other diseases?
Is passive smoking harmful?
Is nicotine addictive?

As answers to these medical questions have become clearer, the focus of much of the discussion has turned to economic issues:
  • Do smokers pay their way?
  • Does the tobacco industry create employment, income and balance of payments benefits?
  • Does tobacco advertising increase cigarette consumption?
This publication provides a survey of the economic issues relating to smoking, with particular emphasis on factors relevant to developing nations in the Pacific. These include:
  • The nature of the social costs of smoking
  • The budgetary impact of smoking
  • Estimating the social costs of smoking
  • Future smoking cost trends in developing countries
  • The effects of smoking on employment, income and the balance of payments
  • The economic impact of reduced smoking in certain Pacific Islands
  • Policy implications of the social costs of smoking.
The objective of this publication is to apply economic analysis to smoking issues in order to provide the reader with a reasoned and balanced view of the economics of smoking. In particular, it is intended to provide to the governments of the Pacific Islands a sound economic basis for the development of rational public policies towards smoking.