Home

Costs to the Economy

* Attributable to tobacco use, excluding intangible costs such as pain, suffering, and the value of human life, 2007 or latest available data.
** Millions of US$: Direct health-care costs plus indirect costs, including productivity loss, absenteeism, and other socioeconomic costs.

“What this case is really about is an industry…that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system.”

—Judge Gladys Kessler. United States District Court for the District of Columbia, August 17, 2006

Tobacco companies frequently attempt to persuade governmental authorities and the public that smoking has economic benefits. They claim that steps to reduce tobacco consumption will decrease tax revenues and increase unemployment, and even that smoking relieves an economic burden to national economies by hastening the death of dependent elderly. In fact, tobacco imposes enormous economic costs on every country. Tobacco’s estimated $500 billion drain on the world economy is so large that it exceeds the total annual expenditure on health in all low- and middle-resource countries.

Tobacco’s economic costs extend beyond the direct costs of tobacco-related death and related productivity losses. Other costs include health-care expenditures for active and passive smokers, employee absenteeism and reduced labor productivity, fire damage due to careless smokers, increased cleaning costs, and widespread environmental harm from large-scale deforestation, pesticide and fertilizer contamination, and discarded litter. Tobacco’s total economic costs reduce national wealth in terms of gross domestic product (GDP) by as much as 3.6 percent.

Tobacco is an important cash crop in very few countries. The Framework Convention on Tobacco Control recommends that countries shift away from tobacco agriculture to economically viable alternatives. Progressive public policies encourage tobacco farmers and workers involved in cigarette manufacturing and distribution to transition into other industries that improve overall public health and welfare without sacrificing livelihoods or creating undue hardship.

China 1998. Medical costs from smoking impoverish more than 50 million people.

chart

chart

chart

MPOWER logo

Monitor tobacco use and prevention policies
Protect people from tobacco smoke
Offer help to quit tobacco use
Warn about the dangers of tobacco
Enforce bans on tobacco advertising, promotion and sponsorship
Raise taxes on tobacco

Building on the first-ever global public health treaty - the Framework Convention on Tobacco Control (FCTC) - the World Health Organization (WHO) in 2008 issued a comprehensive country-level report on the global tobacco epidemic. This report provides data from 179 countries covering 99% of the world’s population and sets baselines for implementation and enforcement of the six evidence-based and cost-effective policies of the WHO MPOWER strategy. Currently only 5% of the world’s population is fully protected by any one of the MPOWER interventions and no country implements and enforces all of them. By taking action to implement MPOWER, the leaders of governments and civil society can create the necessary environment to protect children from tobacco, help people quit tobacco use and save millions of lives a year.

The final version of the online Tobacco Atlas will have information on MPOWER steps related to the issues portrayed on each map.

“Reflecting 5.23 years of life lost for the average smoker— indirect positive effects [are that] public finance benefits from smoking indirectly, via savings on the healthcare costs—in pensions—and public housing costs savings.”

—Report on the Czech Republic, commissioned by Philip Morris, 2001