Report prepared for the Alcohol Advisory Council of New Zealand, the Health Research Council of New Zealand, and the Public Health Commission. Contents and Executive Summary. Published in full as Public Health Monograph No 2 Department of Public Health, Wellington School of Medicine.
Keywords Health; Regulation
CONTENTS
Introduction and Acknowledgements
Executive Summary
1. The Cost-of-Illness Framework for Measuring the Social Costs of Substance Abuse
2. The Social Costs of Tobacco Use
3. The Social Costs of Alcohol Misuse
4. Conclusion: Comparing the Social Costs of Tobacco Use and Alcohol Misuse
Appendices
1. The Value of Life
2. The Value of Life in New Zealand
3. The Problem of Valuation when the Consumer is Addicted
EXECUTIVE SUMMARY
1. Social Cost of Drug Abuse studies are an example of cost-of-illness studies.
2. Cost-of-illness studies are based upon the valuation of the additional costs and benefits of a carefully specified counterfactual scenario.
3. The counterfactual scenarios used in this study are:
Tobacco Use: There is, and has been, no consumption of tobacco and the alternative consumption and other activities are benign.
Alcohol Misuse: Alcohol consumption which exceeds a “safe” limit does not occur, and people change their behaviour for consumption levels below that, so their behaviour is not inappropriate.
4. In the counterfactual scenario, people live longer and have a healthier life (the intangible costs), and there is less expenditure both directly and indirectly associated with the drug consumption (the tangible costs), which also have to be adjusted for any benefits from the consumption of the drugs.
5. The estimates of the social costs for tobacco use and alcohol abuse for the 1990 year are summarized in the accompanying table.
6. Tobacco Use
The use of tobacco has
– reduced the New Zealand population by about 2.0 percent;
– reduced the overall quality of life (intangible costs) by about 3.2 percent (including the population loss);
– reduced the available material goods and services (tangible costs) by around 1.7 percent (of GDP).
7. Alcohol Misuse
The misuse of alcohol has
– reduced the New Zealand population by about 0.8 percent;
– reduced the overall quality of life (intangible costs) by about 2.0 percent (including the population loss);
– reduced the available material goods and services (tangible costs) by around 4.0 percent (of GDP).
8. The study concludes that:
THE SOCIAL COSTS OF TOBACCO MISUSE AND TOBACCO ABUSE ARE VSSQ – VERY SIGNIFICANT, SOME QUANTIFICATION.
SUMMARY TABLE
SOCIAL COSTS of TOBACCO USE & ALCOHOL MISUSE
Measured Relative to Stated Counterfactual Scenarios
(1990)
Tobacco
Intangible
Effect of population mortality $14,000m
Effect of population morbidity $7,250m
Tangible
Reduced production from mortality $400m
Reduced production from morbidity $145m
Additional resources from consumption $580m
Additional resources from not have to treating induced diseases and other consequences $205m
Less
Benefits from consumption $-125m
Total Costs of Abuse $22,470m
Intangible Costs
Total $21,250m
Percentage of total human capital 3.2%
Tangible Costs
Total $1,220m
Percentage of GDP 1.7%
Population Decrease 2.0%m
Alcohol
Intangible
Effect of population mortality $6,000m
Effect of population morbidity $7,200m
Tangible
Reduced production from mortality $600m
Reduced production from morbidity $1,200m
Additional resources from consumption $900m
Additional resources from not have to treating induced diseases and other consequences $750m
Less
Benefits from consumption -$540m
Total Costs of abuse $16,110m
Intangible Costs
Total $13,200m
Percentage of total human capital 2.0%
Tangible Costs
Total $2,910m
Percentage of GDP 4.0%
Population Decrease 0.8%