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ENVIRONMENTAL TOBACCO SMOKE AND LUNG CANCER RISK
By C. Stephen Redhead and Richard E. Rowberg, Senior Specialist in Science and Technology Policy. 75 pages. In 1992 the Environmental Protection Agency
classified environmental tobacco smoke (ETS) as a known human carcinogen and estimated that ETS exposure is responsible for about 3,000 lung cancer deaths each
year among adult nonsmokers. The Ocupational Safety and Health Administration also estimated the lung cancer risk from workplace ETS exposure as part of its
proposed indoor air quality rule. This report analyzes the uncertainties in ETS cancer risk assissments using epidemiological studies of non-smoking women married to
smoking husbands. Order No. 95-1115 SPR.
TOBACCO ADVERTISING: WHETHER THE FDA'S RESTRICTIONS VIOLATE FREEDOM OF SPEECH
By Henry Cohen, American Law Division. Updated May 23, 1997. 16 pages. This report considers whether the FDA's new final rule restricting tobacco advertising
violates the First Amendment's guarantee of freedom of speech. Order No. 96-825 A.
SMOKING-A FACT SHEET
By Scott M. Becker and C. Stephen Redhead, Science Policy Research Division. July 25, 1996. 3 pages. This fact sheet outlines recent estimates of the prevalence of
cigarette smoking in the United States. It also summarizes the health effects and health costs of smoking. Order No. 96-651 SPR.
Warning: The Tobacco Settlement Is Dangerous to Your Liberty
by Robert A. Levy
Robert A. Levy is senior fellow in constitutional studies at the Cato Institute. July 29, 1997
Summary: by Robert A. Levy Robert A. Levy is senior fellow in constitutional studies at the Cato Institute. The tobacco settlement is a shameful proposal,
extorted by public officials who have perverted the rule of law to tap the deep pockets of an unpopular industry. In a 68-page "Proposed Resolution," the
industry agreed to pony up $370 billion, submit to Food and Drug Administration...
TOBACCO SETTLEMENT
NOTHING BUT A SHAKEDOWN
by Robert A. Levy
Summary: In addition, tobacco companies will be assessed a penalty in the years 2002, 2004, and 2007 if the nation fails to meet respective goals of 30
percent, 50 percent, and 60 percent declines in youth smoking. Therefore, a full 75-cent price hike (roughly 40 percent) would reduce the number of cigarettes
sold by about 16 percent. In addition, cigarettes will contain a more dire warning (cigarettes...
Robert A. Levy is senior fellow in constitutional studies at the Cato Institute.
Addendum to Cato Policy Analysis No. 275 , June 27, 1997
TOBACCO MEDICAID LITIGATION:
Snuffing Out the Rule of Law
by Robert A. Levy
Summary: Incredibly, the act originally provided that Florida was not required to identify the individual recipients of Medicaid payments; instead, the state could
seek recovery for all recipients, anonymously, as a group. Third, the state "shall not be required to . . . identify the individual recipients for which payment has
been made, but rather can proceed to seek recovery based upon payments...
Robert A. Levy is senior fellow in constitutional studies at the Cato Institute.
Cato Policy Analysis No. 275, June 20, 1997
Do Smokers Have Rights?
The Science and Politics of Tobacco
On October 3, the Cato Instituters F. A. Hayek Auditorium was the setting for a seminar, "Cutting through the Smoke: The Science and Politics of Tobacco." Among
the speakers were Jane Gravelle, an economist with the Congressional Research Service; Jacob Sullum, articles editor of National Review; Sheldon Richman, senior
editor at the Cato Institute; and moderator William A. Niskanen, chairman of the Cato Institute. The views presented here do not necessarily reflect those of the
Congressional Research Service.
Summary: Fifty billion dollars a year is not the increase in medical costs due to smoking. You hear that passive smoking might increase your risk 20 percent, 50
percent, 70 percent, but what you don't know is that lung cancer among nonsmoking individuals is a very, very rare disease.) A major problem is that the
government pays some people's medical bills, so the costs of medical care do not figure into a...
Secondhand Smoke
Facts and Fantasy
Summary: In terms of the statistical significance of the effects, 10 of the 11 studies cited to justify the regulation fail to indicate a statistically significant linkage.
Overall, smokers impose higher medical-care costs of 46 per pack; higher sick-leave costs of 1 per pack; greater life-insurance costs of 11 per pack; additional
costs due to fires of 2 per pack; and foregone Social Security taxes on...
Regulation Vol. 18, No. 3, 1995
© 1995 Cato Institute
W. Kip Viscusi is the George G. Allen Professor of Economics at Duke University.
Regulation, 1997, Vol. 20, No. 3. Published four times a year by the Cato Institute. Copyright 1997 Cato Institute.
Two clear conclusions stand out. First, the issue of nonsmokers subsidizing smokers only arises because medical and retirement insurance pools the two groups and does not differentiate between them when assigning costs or distributing benefits. Those are transfer costs. And second, taxing smokers might remove their subsidy and real externalities, but it does not help nonsmokers; it results in an actual loss of wealth to the economy. It was assumed for the sake of argument that health insurers cannot separate smokers and nonsmokers in current programs. But insurers in other markets separate risk classes by all manner of characteristics, including age, gender, health background, and job category. The fact that there are not differential rates for smokers could mean that there are no externalities worth internalizing. Smokers and nonsmokers may be charged common prices for health insurance, in contrast to the prevalence of differential pricing for life insurance, because there is no sound actuarial basis for seeking to place smokers and nonsmokers into distinct categories. And if there are actuarial differences between smokers and nonsmokers, as is assumed in the new economics of smoking, the external costs those differences entail could be internalized for about a penny a pack. Or, there might be externalities and good reason to treat smokers and nonsmokers differently in medical and retirement programs. That suggests that government regulation of insurance markets prevents such internalizing efforts. Thus it is a political, not and economic defect, that keeps smokers and nonsmokers pooled in government medical and retirement systems. Politics is the cause of the subsidy.
July 29, 1997