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States could see substantial savings with tobacco control programs
Date:11/28/2011

States that have shifted funds away from tobacco control programs may be missing out on significant savings, according to a new study co-authored by San Francisco State University economist Sudip Chattopadhyay.

If these programs were funded at the levels recommended by the Centers for Disease Control and Prevention (CDC), states could save an astonishing 14-20 times more than the cost of implementing the programs. The costs of smoking are felt by the states, mostly through medical costs, Medicaid payments and lost productivity by workers.

The evidence is clear that state tobacco control programs have a "sustained and steadily increasing long-run impact" on the demand for cigarettes, Chattopadhyay and his colleague David R. Pieper at University of California, Berkeley write in a paper published online today in the journal Contemporary Economic Policy. Chattopadhyay is the chair of the Economics Department and professor of economics.

The study uses data from 1991 to 2007, during which time the states paid for the programs with the help of the tobacco tax, public and private initiatives and funds from the Tobacco Master Settlement Agreement between the nation's four largest tobacco companies and 46 states.

Unfortunately, says Chattopadhyay, funding for the programs has been declining steadily since about 2002. In 2010, states on average were spending 17 percent of the total investment recommended by the CDC for the programs. And in tough economic times, many states have turned to cigarette taxes to raise revenue.

Chattopadhyay said the shift in spending priorities was part of his motivation for examining the benefits and costs behind the programs. "Almost all states are facing financial crisis, and they are really diverting their funds, possibly moving funds from productive use."

Unless the benefits of fully funding the programs are shown to outweigh the costs, the researchers suggest, states may continue to dive
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Contact: Elaine Bible
ebible@sfsu.edu
415-405-3606
San Francisco State University
Source:Eurekalert  

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