The negative externalities of smoking – more fiction than fact?

Whenever the topic of negative externalities is taught the example of smoking is resurrected.  The usual analysis is that smokers fall ill and demand NHS treatment and, given that the NHS is funded by taxpayers, we all foot the bill for their decision to smoke.  This then usually leads to a discussion of taxation and this argument is used as a justification for the very high taxes on cigarettes.  So far, so predictable.  However, this article from The Daily Telegraph, suggests we need to think again.

http://blogs.telegraph.co.uk/finance/jeremywarner/100028193/the-truth-about-smoking-it-saves-us-all-a-lot-of-money/

The overall external cost of smoking to wider society is, therefore, less clear than we might think and now that smoking is banned in public places there might be few negative externalities.  How do we now justify all that tax on a packet of cigarettes?  Over to you, Mr Osborne…..

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s