Skip to main content Accessibility help
×
Home

The U.S. Tobacco Buyout: A Partial and General Equilibrium Analysis

  • Andrew Schmitz (a1), D.J. Haynes (a1), Troy G. Schmitz (a2) and Evan D. Schmitz (a3)

Extract

This article analyzes the impact of removing the U.S. tobacco program in both a partial and general welfare economics framework. In a partial-equilibrium framework, a consumer tax-funded quota buyout can result in producer gains, consumer losses, net losses resulting from higher prices, and deadweight losses. In a general-equilibrium framework, society can gain from the buyout resulting from considerable potential savings from reduced healthcare costs attributable to a reduction in smoking. Additionally, we present a model that addresses the addictive qualities of tobacco while considering the effects of the quota buyout. We also conclude that another possible effect of the buyout is an increase in worker productivity because employees who are able to quit smoking reduce the amount of smoking-related sick days taken.

Copyright

References

Hide All
Alberg, A.J., and Samet, J.M.. “Epidemiology of Lung Cancer.Chest 123(2003):173.
American Cancer Society. Cancer Facts & Figures 2012. Atlanta, GA: American Cancer Society, 2012. Internet site: www.cancer.org/acs/groups/content/@epidemiologysurveilance/documents/document/acspc-031941.pdf (Accessed December 2012).
Brown, A.B., Rucker, R.R., and Thurman, W.N.. “The End of the Federal Tobacco Program: Economic Impacts of the Deregulation of U.S. Tobacco Production.Review of Agricultural Economics 29(2007):635–55.
Brown, A.B., and Snell, W.M.. U.S. Tobacco Situation and Outlook Report. Washington, DC: Economic Research Service, United States Department of Agriculture, 2012.
Brown, A.B., Snell, W.M., and Tiller, K.H.. “The Changing Political Environment for Tobacco— Implications for Southern Tobacco Farmers, Rural Economies, Taxpayers, and Consumers.Journal of Agricultural and Applied Economics 31(1999):291308.
Centers for Disease Control and Prevention. The Health Consequences of Smoking: A Report of the Surgeon General. Atlanta, GA: US Department of Health and Human Services, 2004. Internet site: www.cdc.gov/tobacco/data_statistics/sgr/sgr_2004/index.htm (Accessed November 2012).
Centers for Disease Control and Prevention. National Center for Health Statistics. Final Vital Statistics Report. Deaths: Final Data for 2007. 58,19(2010).
Centers for Disease Control and Prevention. “Smoking-Attributable Mortality, Years of Potential Life Lost, and Productivity Losses— United States, 1997-2001.Morbid Mortal Wkly Rep 54(2005):625-28.
Centers for Disease Control and Prevention. “Smoking-Attributable Mortality, Years of Potential Life Lost, and Productivity Losses— United States, 2000-2004.Morb Mortal Wkly Rep 57(2008):1226-28.
Centers for Disease Control and Prevention. Lung Cancer Statistics—United States, 2009. 2013. Internet site: www.cdc.gov/cancer/lung/statistics/.
Chan, K.K., and Capehart, T.C.. “Health Concerns or Price: Which Takes Credit for Declining Cigarette Consumption in the United States?Choices (New York, NY.) 1(2004):4346.
Fulginiti, L., and Petrin, R.. “The Theory and Measurement of Producer Response under Quotas.The Review of Economics and Statistics 75(1993):97106.
Goodwin, B.K., and Sumner, D.A.. Market Supply Parameters under Mandatory Production Quotas. Unpublished manuscript. Raleigh, NC: North Carolina State University, 1990.
Gruber, J.Smoking's Internalities.” Regulation 25(2003/2004):5257.
He, Y, Jiang, B., Li, L.S., Ko, L., Wu, L., Sun, D.L., He, S.F., Liang, B.Q., Hu, F.B., and Lam, T.H.. “Secondhand Smoke Exposure Predicted COPD and Other Tobacco-Related Mortality in a 17-year Cohort Study in China.Chest 142(2012):909-18.
HealthDay.com. 2012. Internet site: http://consumer. healmday.com/Article.asp?AID= 671078 (Accessed November 28, 2012).
Howlader, N., Noone, A.M., Krapcho, M., Neyman, N., Aminou, R., Altekruse, S.F., Kosary, C.L., Ruhl, J., Tatalovich, Z., Cho, H., Mariotto, A., Eisner, M.P., Lewis, D.R., Chen, H.S., Feuer, E.J., and Cronin, K.A., (eds). SEER Cancer Statistics Review, 1975-2009 (Vintage 2009 Populations). Bethesda, MD: National Cancer Institute, 2012. Internet site: http://seer.cancer.gov/csr/1975_2009_pops09/ (Accessed December 2012), based on November 2011 SEER data submission.
Jones, W.The Master Settlement Agreement and Its Impact on Tobacco Use 10 Years Later. Lessons for Physicians about Health Policy Making.Chest 137,3(2010):692700.
Just, R.E., Hueth, D.L., and Schmitz, A.. The Welfare Economics of Public Policy: A Practical Approach to Project and Policy Evaluation. Cheltenham, UK: Edward Elgar Publishing, 2004.
Schmitz, A., Kennedy, P.L., and Hill-Gabriel, J.. “Restoring the Florida Everglades through a Sugar Land Buyout: Benefits, Costs, and Legal Challenges.Environment and Ecology 3(2012):7287.
Schmitz, A., Moss, C.B., Schmitz, T.G., Furtan, H.W., and Schmitz, H.C.. Agricultural Policy, Agribusiness, and Rent-Seeking Behaviour. 2nd ed. Toronto, Canada: University of Toronto Press, 2010.
Schmitz, T.G., Schmitz, A., and Haynes, D.J.. “Inflated Production Quota Gains Paid for by a Consumption Tax.Theoretical Economics Letters 2(2012):6768.
Serletis, G.S., and Fetzer, J.J.. Modeling thè Impact of the U.S. Tobacco Quota Buyout. Office of Economics Working Paper. Washington, DC: U.S. International Trade Commission, 2008.
Sharma, A., Deeb, A.P., Iannuzzi, J.C., Rickles, A.S., Monson, J.R.T., and Fleming, F.J.. “Tobacco Smoking and Postoperative Outcomes after Colorectal Surgery.” Annals of Surgery, October 10, 2012.
Sloan, R.A., Smith, V.K., and Taylor, D.H. Jr. The Smoking Puzzle: Information, Risk Perception, and Choice. Cambridge, MA: Harvard University Press, 2003.
Tirrell, M. More than Half of U.S. Smokers Have Tried to Quit. Bloomberg.com, November 8, 2012. Internet site: www.bloomberg.com/news/2012-11-08/more-than-half-of-u-s-smokers-have-tried-to-quit.html (Accessed November 29, 2012).
USA Today.com. Judge Orders Tobacco Companies to Say They Lied. November 27, 2012. Internet site: www.usatoday.com/story/news/nation/2012/11/27/judge-smoking-cigarettes-tobacco-lied/1730305/ (Accessed November 28, 2012).
Weimer, D.L., Vining, A.R., and Thomas, R.K.. “Cost-Benefit Analysis Involving Addictive Goods: Contingent Valuation to Estimate Willingness-to-Pay for Smoking Cessation.Health Economics 18(2009):181202.
Weng, S.F., Ali, S., and Leonardi-Bee, J.. “Smoking and Absence from Work: Systematic Review and Meta-Analysis of Occupational Studies.Addiction (Abingdon, England) 108(2012):307-19.

Keywords

The U.S. Tobacco Buyout: A Partial and General Equilibrium Analysis

  • Andrew Schmitz (a1), D.J. Haynes (a1), Troy G. Schmitz (a2) and Evan D. Schmitz (a3)

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed