A measure of the economic benefits of tobacco production to the state of South Carolina

Abstract

Social cost of smoking has created much controversy regarding tobacco consumption. Information on distributional implications of legislations that restrict cigarette consumption are important for assessing new policies. Estimates of the benefits of tobacco to alternative sectors of the South Carolina economy are highly dependent upon assumptions made concerning the opportunity costs of resources used for tobacco production. Results show that the contribution of tobacco to farm income, hired-labor employment, and gross output of the economy are large. Benefits of tobacco production are reduced, however, if a new product can be produced on resources used for tobacco.