Economic Benefits of Achieving Realistic Smoking Cessation Targets in Australia

Abstract

We estimated the economic impact of reductions in the prevalence of tobacco smoking on health, production, and leisure in the 2008 Australian population. We selected a prevalence target of 15%. Cohort lifetime health benefits were modeled as fewer incident cases of tobacco-related diseases, deaths, and disability-adjusted life-years. We estimated production gains by comparing surveyed participation and absenteeism rates of adult smokers and ex-smokers valued according to the human capital and friction cost approaches. We estimated household production and leisure gains from time use surveys and valued these gains with the appropriate proxy. In the 2008 Australian population, an absolute reduction in smoking prevalence of 8% would result in 158,000 fewer incident cases of disease, 5000 fewer deaths, 2.2 million fewer lost working days, and 3000 fewer early retirements and would reduce health sector costs by AUD 491 million. The gain in workforce production was AUD 415 million (friction cost) or AUD 863 million (human capital), along with gains of 373,000 days of household production and 23,000 days of leisure time. Lowering smoking prevalence rates can lead to substantial economic savings and health benefits.