The Preventative Health Taskforce has just delivered its report to the government and recommends increasing the price of tobacco.
Sounds more or less reasonable to me on economic principles, except that I do know that demand for tobacco is “inelastic”, which is a fancy way of saying it doesn’t respond well to price signals.
Then while driving home I heard one of the experts on Australia Talks complain that out of an unnamed 18 countries Australia has the 16th cheapest cigarettes.
Run that by me again. I thought I knew that Australia had one of the lowest smoking levels in the developed world, and if that is the case at the same time that we have some of the cheapest cigarettes, why the level of confidence amongst “health experts” that putting their price up will lead to a decline in their use? We’re seem to be doing pretty well with a low level of price.
So I decided to do some basic investigations.
WHO has compiled an “atlas” of smoking per capita as at 2002. I could only find two developed nations with smoking levels below Australia’s 19.5%. They were Sweden 19.09% and Portugal 18.7%.
The report is not available from the Taskforce’s website yet (their What’s New page was last up-dated on the 16th April) and neither it seems is their media release. There is a June report there, which you can access from this page.
So I can’t see what they have based their assessment on, but according to News the report says:
“The price of cigarettes has not kept pace with the price of many other products and services,” the report says.
“If cigarettes in Australia were to cost as much as they do in Ireland, around $20 for a pack of 30, they would still be cheaper than the price of three hours in a city parking station, a quarter of a tank of petrol in a small car, an outing to a movie with a treat from the snack bar or one music CD download. “
So I checked the smoking rate in Ireland, which is being held up as an example. Bad example, it turns out. 31.5% smoke in Ireland – a rate more than 50% higher than ours. So much for cigarettes at $20 a packet being a panacea.
I’m beginning to suspect that the relationship between smoking and the price of tobacco is pretty tenuous. To be sure you’d need to do a full survey across the world and the information doesn’t appear to be available on the web.
What I can say, looking at the web, is that the only countries who in 2002 met the aspiration of the taskforce that only 10% of the population should be smokers were:
- Haiti 9.7%
- Libya 4.0%
- Nigeria 8.6%
- Oman 8.5%
- Rwanda 5.5%
- Senegal 4.6%
- UAE 9.0%
Seems to me that cultural factors and perhaps absolute poverty (rather than the cost of the product) are the things which ultimately drive cigarette smoking levels.
If I were a smoker, I’d feel persecuted by this particular recommendation.