3 Questions: Jonathan Gruber on the cost of smoking

Leading health care economist weighs in on a proposed cost-benefit analysis of smoking.

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Earlier this year, the U.S. Food and Drug Administration (FDA) proposed new regulations for e-cigarettes, and in so doing developed a much-debated cost-benefit analysis of smoking — one that discounts the benefits of quitting smoking by 70 percent due to the loss of pleasure involved. MIT’s Jonathan Gruber, a high-profile health care economist, is among the skeptics of the new calculation: He has conducted research on smokers and is co-author of a new piece in the Annals of Internal Medicine, published this week, suggesting that the “lost pleasure” is smaller than the government is currently estimating. Gruber, the Ford Professor of Economics, discussed the issue with MIT News recently.

Q. Cigarette labeling and smoking have been the subject of political debate for decades. What is new and surprising in these debates that have sprung up in 2014?

A. The major issue at stake is the reach of the FDA in regulating self-damaging activities such as smoking. This is an important and controversial area. The FDA has, for the first time, included in its cost-benefit analysis of regulations the “lost pleasure” of those who stop smoking due to regulation. I think that this is inappropriate and a misreading of the evidence on how smoking decisions are made.

Q. You have studied topics such as the adoption of smoking by teenagers and the question of whether or not consumers understand the risks associated with smoking, among other things. What is some of the most relevant evidence that should inform the discussion?

A. I think there are two clear conclusions from past research in this area. First, those who initiate in their teenage years — as more than 75 percent of smokers do — do not understand the addictive nature of smoking. One study asked high school seniors smoking one pack or more per day whether they would be smoking in five years. Among those who said that they would be smoking, 72 percent were smoking; among those who said they would not, it was 74 percent.

Second, smokers generally have a “self control” problem: They would like to quit, but cannot do so. Data from a 2002 survey show that more than 9 out of 10 smokers agreed or strongly agreed with the statement, “If you had to do it over again, you would not have started smoking.” Further, 7 out of every 10 smokers reported that they wanted to quit smoking, and more than half of all smokers stopped smoking for at least one day with the intent of quitting permanently. Yet only 2.7 percent of smokers quit each year. My own research finds that the self-reported happiness of potential smokers rises when cigarette taxes are increased.

Q. How should policymakers best interpret such facts, and assess the costs and benefits of smoking?

A. Given this evidence, policymakers should not be applying the standard economics model [in which people are presumed to act rationally] to smoking policy, which would imply relatively little merit for features such as warning labels. Rather, it is important to consider alternative models that incorporate the type of evidence cited above. For example, my own research shows that if you treat all smokers as standard, rational, patient, forward-looking consumers, then we should probably tax cigarettes at below $1 per pack. But if you incorporate the self-control problems noted above — not even including the failures of teens to anticipate the future — the appropriate tax rises to $5 to $10 per pack.

Topics: Economics, Health, Research, Policy, Health care, SHASS, 3 Questions


Given the recent revelations that Gruber "lied" about the ACA (Obamacare) why should anyone believe anything this guy has to say? Oh wait, that's right the ends justify the means. What a load of horse manure!

This guy does not seem to understand that if one does not smoke then they will find an alternative for their addictive personality. The real reason taxes are high on cigarettes is that the government wants as much cash as they can steal from us for the children. It is never about the children. I would never pay a school to have this idiot teach my children anything

If an MIT economics professor seriously doesn't understand that decoupling self-destructive behavior from its consequences (e.g. by universal health care) will only encourage more of it, the bar has truly been lowered. Likewise when we absolve parents from responsibility for the behavior of their irrational teenagers and imagine that a nanny state will do it better.

Dr. Gruber has shown that his opinion and support for a topic can be bought and paid for. He was paid $400,000 for his work on Obamacare.
Sure will help with getting funding for research! Line up folks! Tell us what you want the answer to be and we'll quote you a price.

I feel sorry for his students. Why would they believe anything he says?

agreed the guy is a rip off artist, and elitist that thinks he is soo much better than the rest of us

Dr. Gruber, were you lying when you described me as a stupid voter or were you lying when you denied saying that? BTW... you did an AMAZING job designing Obamacare. You managed to avoid fixing what needed fixing and breaking what worked in our healthcare system. Genius.

"A poll among high school seniors smoking one pack or more per day .... 72 percent were smoking"

Brilliant !

congrats on being labeled a "liar and cheat"

It would seem that most economist today are lefties. Does anyone subscribe to the old belief that capitalism is the most efficient economic system for the use of resources and capital?


Gruber should return all of the money he received for his shady work. More than $5.8 million which he stole from the stupid people of america! And he is a professor from MIT!

Highland Hill Farm is Boycotting MIT Till Gruber is fired see http://youtu.be/XYatVQw38_c

Boy, I'm sure MIT loves Gruber now! Come on, MIT, everyone is watching how you are going to handle this.

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