The macroeconomic and distributional effects of reduced smoking prevalence in New South Wales
June 2004
Summary
Tobacco industry interests often oppose new tobacco control strategies by claiming such measures will damage the economy and “cost jobs”.
The Cancer Council NSW commissioned health economists Bill Junor, David Collins and Helen Lapsley to undertake a detailed macroeconomic assessment of which industry sectors would be affected if smoking prevalence in NSW dropped by 25%. They concluded that the effects upon aggregate NSW output and employment would be minor. In fact the only industry to be significantly affected would be the tobacco industry itself.
One of the unexpected benefits of a 25% drop in prevalence across the State is that the greatest beneficiaries would be households in the lowest socioeconomic group who spend 18% of their income on tobacco products compared to 3% spent by the highest SES groups
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