The tobacco industry argues that it can satisfy employment field and also government in case of revenue. However there are two points in this argument. Firstly, it underestimates the magnitude of tobacco’s impact on the economy by ignoring costs such as lost productivity and provision of health care for illnesses caused by smoking. Secondly, the industry exaggerate the importance of jobs in the tobacco industry by assuming that resources devoted to tobacco production and distribution would disappear if tobacco production were reduced or if sales were to decline.

Reduced lifetime demand for health care services:

It is often argued that smokers actually save the taxpayer money by dying early, thereby avoiding lengthy and expensive care in old age.

A Danish study has examined the question of lifetime impact on health care by estimating the health costs to society over the entire lifetime of smokers compared to those who quit smoking. The researchers found that the potential lifetime health costs to society associated with continuing to smoke are substantial, in terms of both excess health care operation and reduced worker supply. The potential direct and productivity lifetime health cost savings to society associated with quitting are highest at the younger ages. Comparing 35-year-old ex-smoking men who quit smoking at the age of 35 with 35-year-old continuing smokers, the direct lifetime health cost savings of smoking cessation to society are 30-42%. The corresponding results are 34-43% in ex-smoking women. However the direct lifetime cost savings of smoking cessation to society is reduced to less than 12% in ex-smokers who quit later than at the age of 55.

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Essays, UK. (November 2018). The Role Of Tobacco In The Economy Economics Essay. Retrieved from https://www.ukessays.com/essays/economics/the-role-of-tobacco-in-the-economy-economics-essay.php?vref=1