Up in Smoke

Cigarette Smoking has fallen to the level of the 1890s thanks to New Zealand’s rigourous anti-smoking policies.
Listener 28 March, 1998.

Keywords: Health

The greatest epidemic the world faces is not HIV-Aids, but diseases from tobacco smoking, which kill more than Aids, maternal and childhood conditions, and tuberculosis combined. A peculiarity of the smoking epidemic is it is driven by the commercial imperatives of tobacco growers, manufacturers, and distributors. Most diseases are not profit driven, but it is becoming increasingly clear from records released during American litigation that the tobacco companies knew tobacco consumption was addictive, and were aware that smoking caused early death, and poorer quality of life. Yet they encouraged the addiction and promoted tobacco sales.

Tobacco consumption levels are falling in the western world, although the disease consequences continue to rise. (In New Zealand they may have just peaked for males – thirty years after smoking levels peaked – but female fatalities continue to rise.) Elsewhere, tobacco consumption is expected to rise for at least a quarter of a century, as the corporations seek new markets among the poor of the world. The disease consequences will be with us for the rest of the next century.

In South Africa, smoking prevalence (the proportion of adults who smoke) is currently 38 percent among the whites (ours is below 25 percent). But among the 25 million blacks prevalence is only 26 percent. (The Maori rate is nearer 43 percent.) With rising incomes and increased market sophistication, here and elsewhere in the developing world, the tobacco companies see profitable opportunities.

Economics has a major role to stop the tobacco epidemic. Most powerfully, higher excise duties choke off consumption. Here the initial effect of a 10 percent rise in tax is to cut consumption by about 2 percent. But the higher taxes discourage children and adolescents starting up serious smoking. The effect does not appear immediately in cigarette consumption. As time goes on, as smokers die off, the lack of recruits means long run consumption is depressed by two and three times the initial impact.

While tobacco tax is the most obvious economics contribution, there are also effects from banning advertising and sponsorship, restricting the young’s access, and smoke free areas. In each case the empirical evidence is much less compelling than that for the effects of taxation, but the balance of the research is they have some effect. My guess is that as for taxation, for which we have much more data, the significant gains are in the long run.

New Zealand has already implemented most of these policies, although we could tighten them: raising tobacco excise duties – ours are not the highest in the world; abolishing duty frees; imposing generic branding; paying more attention to the circumstances of adolescents, of the Maori, of ethnic minorities, and women.

Recently the World Bank joined the World Health Organisation, in identifying smoking as an avoidable disease. This reflects the Bank’s steady shift towards promoting health and welfare rather than merely funding physical projects, as a part of its commitment to long term sustainable development.

The world admires the success of New Zealand’s anti-tobacco policies. In 1971 our tobacco consumption was around 3100 cigarettes (equivalent) for every adult. Today it is 1400, a level comparable to that in the 1890s before the cigarette explosion. If the developing world’s smoking is like ours were a century ago, do they have to go through the rise and fall we did, a hundred years of disease and death?

The issues the Bank and WHO face are wider than New Zealand’s. It is estimated that 350 billion cigarettes are smuggled each year, while the Zimbabwe and Malawi economies are so dependent upon tobacco growing they will require international assistance to diversify to as equally profitable horticulture. Although each country must take responsibility for its anti-smoking policies, global institutions such as the World Bank and WHO have a leadership role. Tobacco is, after all, a global epidemic.

The Economics of Tobacco Control Conference

My attendance at the world’s first Economics of Tobacco Control conference was sponsored by the National Heart Foundation (smoking is the biggest avoidable cause of heart disease) and the Central Institute of Technology (which has a degree in alcohol and drug studies). Post-apartheid Cape Town was a felicitous venue, a cosmopolitan first world port of four million people, linked to the bustling third world African heartland. Part of the conference was at the Breakwater Campus of the University of Cape Town. Once a jail for those going to the notorious Robbins Island detention centre, it now has the presence of an Oxbridge College: its quad was once the exercise yard; MBA students are housed in the cells.

South Africa’s, Dr Nkosazana Zuma, committed to attacking the tobacco epidemic. As well as a major hike in the excise duty rate, she funded an economics of tobacco control study.

All conferences have their humorous moments (to offset very long days’ work). It was reported that smoking leads to impotence, which gives a new meaning to the post-coital cigarette. And when it was ironically asked what to do with the unemployable elderly who would be living longer after giving up smoking, someone called out “love them.”


The following table of New Zealand Tobacco Consumption was not published.

Cigarette Equivalents/population over 15

Year Consumption
1891 1500
1911 1800
1931 1900
1951 3300
1971 3100
1991 1800
1995 1400