Tuesday, July 31, 2007

Andrews was prudent to act on valid suspicions

Imre Salusinszky says it as well as anyone in relation to Minister Andrew's handling of the Haneef case:

'On balance, this is one of those no-scandal scandals where the stridency of some commentators only underlines their estrangement from the man and woman on the street.

Unfortunately, this estrangement reveals a pattern we have seen repeatedly since 9/11. It sometimes appears the Western intelligentsia does not have the stomach to go a single round in the fight against terrorism, but would rather we blamed ourselves.

Andrews showed common sense in revoking Haneef's visa, and Opposition Leader Kevin Rudd showed equal common sense in supporting that decision. Both men are in responsible positions and I encourage them to maintain their vigilance over the security of my children, my friends and my fellow Australian.' (my bold)

Update: The Australian reports today that chat room conversations involving Haneef suggested to authorities he may have had prior knowledge of the UK bombings. The scramblebrains on the left owe Minister Kevin Andrews an apology - he'll be waiting. I'll forgive the nitwits who made intemperate and foolish remarks on this blog.

Monday, July 30, 2007

Who will win the next election?

Today's Galaxy Poll shows an improvement in the chances of the Coalition - Labor gets 44% of the primary vote compared to the Coalition's 41%. The two party preferred gives Labor 54% and the Coalition 46%. The Coalition have improved their primary vote 4% since April-May. An interesting analysis of the current situation is here. This confirms that the swing to Labor is 'soft' in the sense of being reversible.

I have patiently followed the polls and the betting markets for months. For a long-time I thought the betting markets were unduely optimistic for the Coalition - today Sportingbet is paying $1-60 for a $1 bet on Labor winning and $2-30 for a bet on the Coalition. As the opinion polls have shown the Coalition recovering the odds offered by the bookies for a Coalition win have narrowed.

It is anyone's election in my view though Labor on current poll trends should win by a landslide.

As numerous commentators have said: The forthcoming election will be an interesting test of pollsters versus betting markets. As a good economist I am supposed to say markets aggregate information efficiently.

Obesity cure

Sunday, July 29, 2007

Last word on Haneef?

Md. Haneef has now left Australia. He has been cleared of the charges levelled against him. This does not mean that the charges against him and his possible terrorist links should not have been investigated. On the basis of information available at the time (and in the absence of the ex post wisdom so beloved of the dishonest, ratbag left) he needed to be investigated.

As The Australian remarked yesterday:

‘There is absolutely no doubt that Dr Haneef's connections with alleged terror suspects in Britain had to be investigated. The scale of the task the AFP faced was daunting, sifting through the equivalent of more than 30,000 pages contained in Dr Haneef's laptop, most of it not in English. There is also no doubt that the AFP required the time made available to it under terror legislation to investigate Dr Haneef before laying charges. The AFP also has an important task to fulfill in continuing to investigate Dr Haneef's connections with alleged terrorists in Britain and other people of interest in Australia.’
That Dr Haneef was arrested at Brisbane Airport trying to board a flight on a one-way-ticket to India was also suspicious given its proximity to the attempted bomb attacks. The reports from an Indian newspaper that Haneef was associated with a terrorist training cell also needed study.

Given the evidence available at the time a plausible counterfactual - had he not been arrested - could have been that a suspect, who was suspected of being involved in terrorism, was allowed to flee Australia because suspicions, not backed up by very definite evidence, were not investigated. This would have been unacceptible.

As it turned out two pieces of information given to the AFP and Minister Andrews were false – that the SIM card Haneef had given one of the British terrorists was not in the Scottish bomb attack vehicle and Haneef had not recently lived with the terrorists. An investigation should occur to determine how these errors of information occurred – the source of one error seems to be that the AFP gave the DPP the wrong address for Haneef in Britain. The claim that AFP officers wrote addresses in Haneef’s diary are now revealed to be a lie. Even people who should know better are getting caught up in the frenzy of criticism.

Now charges against Haneef have been dropped although he is still being investigated. The whole process from his arrest to the charges being dropped took only a few weeks and he has even been offered his former job back. He was not been tortured, sent to a Gulag or jailed indefinitely. As Peter Beattie said yesterday - the system works. Haneef himself left Australia with a smile on his face and the stated intention of seeking a new visa and returning to work here. A bitter man whose life has been destroyed as the gutter press claims?

The hysterical response of the left and sections of the Australian media – not the regrettable initial mistakes themselves - damage Australia’s security and its ability to investigate and prosecute terrorism. The main complaint seems to be that:
(i) the charges have now been dropped and
(ii) that an innocent person could have faced charges in a court.

These are toally ridiculous claims since these events are part of the normal processes of law.
The Age’s headline this morning ‘Farewell from the’ land of the fair go’’ hits a new low for what is rapidly becoming the most dishonest and biased newspaper in this country. The accompanying page 2 article by Jason Koutsoukis is just propagandist, anti-Howard politics. It is as disreputable as anything I have seen in this rag. Moreover, it is written up as a straight news story - not described as commentary:

‘THE disgraceful treatment of Mohamed Haneef has all the hallmarks of a typical Howard Government political play'. ('typical'?)

Nasty, divisive, cynical and, of course, no involvement of the Prime Minister himself'. (Good to see a journo who can leave aside his personal moral judgements to give us the facts!)

'Remember children overboard? The whole Commonwealth bureaucracy knew this was nonsense, yet somehow Howard's office did not get the message that no children were ever thrown overboard'. (Judge Jason made this judgement?)

'The $300 million in bribes paid by AWB to Saddam Hussein? Everyone in Canberra seemed to know AWB was up to no good — except Howard'. (Judge Jason again - not the Inquiry which exonerated the Government).

'That his workplace relations laws would make some people worse off? The newly published biography of Howard reveals that this was actually explained to Howard in cabinet — but the Prime Minister cannot remember that'. (He was told something therefore Howard should believe that? Note the sneaky use of the word 'some' - there is 4.5% unemployment and growing real wages.)

'Then there was the terrible mess Howard got himself into in May by trying to deny the existence of a planned climate-change advertising campaign, on the grounds that the ads did not exist until they had got the ministerial tick'. (Judge Jason again)

'With Mohamed Haneef now out of Australia, guilty of nothing more than having a relative who is a suspect in a terrorist case in another country, we have the Prime Minister again saying he knows nothing'. (Judge Jason ignores all early claims believed to be true and acts on the basis of his ex post wisdom).

'When will Howard take responsibility? This time the fall guy is Immigration Minister Kevin Andrews.

The very idea that Andrews would cancel Haneef's visa without deep and protracted consultations with the Prime Minister's office is preposterous. Yet, according to Howard, none of the key decisions were made by him'. (A series of conjectures - no evidence. Not preposterous to me. Andrews is the Minister.)

'Mohamed Haneef's character has been trashed by a Government prepared to do anything to cling onto power'. (Not trashed by the Government but the press did its bit. The press also trashed Australia's reputation and damaged Australia's ability to fight terrorism).

'Yet despite the collapse of the case, no one in the Government has the decency to apologise or even admit that Haneef has been treated unfairly'. (He has not been treated unfairly. Actions were taken given information available. Not the apology nonsense again!)

The Howard Government is beginning to take on all the characteristics of a Government that has lost control. (No Jason you have lost control on this occasion - whatever happened to responsible journalism?)

If John Howard is going to pull off another federal election victory, he must find the discipline that has been the hallmark of his political successes.’ (I think Judge Jason should find a new discipline! Writing fiction or being a left-wing shock jock!).

This is an unsubstantiated stream of allegations that pursues The Age’s ongoing campaign to attack John Howard. It is all about Howard. Almost worse still, Seamus Bradley, in another piece titled ‘Deemed an issue of race and politics’ provides evidence citing exactly the opposite to his title. None of the Indian media make the claims Jason alledges. Never let the facts get in the way of a good headline!

The alternative claim by others on the left that Minister Andrews acted incorrectly under the Migration Act in withdrawing Haneef’s visa is false. He acted without the benefit of ex post wisdom and made a call on the basis of the information available to him. With new information and the decision of the DPP to drop charges against Haneef he may change his view. I don’t know all the facts and neither to the nitwits heaping abuse on Andrews.

The hysterical overreaction to the events surrounding Haneef are being promoted by linking Haneef’s fate with that of the terrorist David Hicks. I hope Haneef sues them – there is no evidence at all that Haneef trained with Al Qaeda anywhere but there is evidence Hicks did. There is no comparability between the cases. The claim of moral equivalency is a disgusting slur on Haneef but it shows where the sympathies of these critics do lie.

Hicks’ father has fostered these distortions:

‘In the wake of Haneef’s release, the father of convicted terrorism supporter David Hicks on Saturday told an anti-war forum in Brisbane that the Indian doctor's case was similar to that of his son's in some ways.’
Innocent people are found innocent and charges are dropped because evidence is found to be flawed. This is a part of the criminal justice system we have. Haneef at this stage looks like he is innocent. The significant damage is not that he was investigated held for a short-period and then released. The problem is the hysterical overreaction to these events. We are becoming a nation of instant know-it-alls, ex post wisdom experts and hysterics.

Our hypersensitivity on these issues is fostered by the idiot left and the sensation-seeking press and promotes anti-western biases. The deeper malaise is that while we react to the slightest infringement on liberties in Australian we are blind to the atrocious treatment of those prosected for crimes in other countries.

In India itself it may have taken months or years for the Haneef case to be resolved. In Iran and Syria there would be no question that a person in Haneef’s position would be tortured and convicted. This is not to say the Australian system is perfect. Wrong information was acted on. But an apparently innocent man was quickly released once imperfections in information were known.

Saturday, July 28, 2007

The pet economy & biophilia

I could barely believe parts of this story. According to this week's Business Week Americans spend $41 billion on their pets which is more than the GDP of all but 64 countries. This is mainly spent on 88 million cats and 75 million dogs. Pets increasingly substitute for human companionship – 42% of dogs now sleep on the same bed as their owners.

The issue of whether things are getting out of hand is firmly resolved by the existence of Neuticles, ‘ a patented testicular implant that sells for up to $919 a pair. The idea, says inventor Gregg A. Miller, is to "let people restore their pets to anatomical preciseness" after neutering, thereby allowing them to retain their natural look and self-esteem. ... "Neutering is creepy. But with Neuticles, it's like nothing has changed." Nothing, except there's a fake body part where a real one used to be.

I don’t have data on the Australian expenditures (I'd be interested if anyone has any!) but notice that nearly a whole isle of most modern supermarkets is taken up with animal feeds and a high proportion of Australian households have that 'wet doggie' odor in their living rooms.

My personal preference is to scrap the high opportunity cost of maintaining enormous cat, dog and caged bird populations and invest the lot in restoring and conserving native biodiversity.

We need non-human life and nature for our survival as a species and to make our lives more pleasant, attractive and interesting. Some have even conjectured that being surrounded by nature improves human genetic fitness.

Edward Wilson advanced the biophilia hypothesis that humans have an ‘innate tendency to focus on life and lifelike processes”. There is seen to be a human dependence or need for nature that extends far beyond needs for material sustenance to encompass, as well, human cravings for aesthetic, intellectual, cognitive and even spiritual meaning and sustenance. Biophilia is seen to be:

  • Biologically-based and inherent. Evolution has produced genetically based responses to biological and other environmental phenomena.
  • Associated with long-term human competitive advantage, genetic fitness.
  • Associated with current possibilities for enhancing personal achievement.
  • A self-interested basis for conservation of biodiversity.
These ideas are difficult-to-test and suggest biophilia might be an attempt to ‘promote a romantic idealization of nature’ (Kellert & Wilson (1997)). In this sense biophilia might be a reaction to anxieties generated by technological and political change. As a rationale for conservation and respect for nature, biophilia is essentially utilitarian.

This general demand for nature might in part explain the specific demand for pets - its biophilia accompanied by the need to live in large cities where nature is almost eliminated.

Kellert & Wilson examine theoretical and empirical evidence to support biophilia. They portray biophilia as a set of learning rules that fall along various instinctive spectra from attraction to aversion (biophobia), from awe to indifference but that are driven by millions of years of evolutionary logic. For example, the constant exposure through evolutionary time to the malign influence of snakes results in an aversion to but fascination with snakes. Wilson suggests we do not need to rely on Freudian theory to account for this fascination. Large numbers of such influences combine to help establish human identity and personal fulfillment.

There is some experimental, and other, evidence supporting this view. Some of this evidence relates to the way we learn to be averse or to favor certain natural experiences (animal or landscape). Further evidence includes the large demands for ‘pets’ in industrial societies as discussed.

Habitat selection can be understood as a biophilic response. It answers the question what is a ‘good place’? This can be reflected in landscape aesthetics and experimentally through the effects of natural settings (or paintings of such or aquaria) in reducing stress and even improving health and creativity.

There is even evidence that positive attitudes to nature indicate lack of conduct disorders in children. Certainly children seem to learn much about the world through species recognition. Thus the principal nouns of interest to small children are body parts and animals.

Adults see animals as important symbols: the honeybee (‘wisdom and sensitivity’), the pig (‘lustful and lazy’) and the bat (‘denizens of the underworld’). This is important because information is processed by means of symbols.

Evidence on the behaviour of hunters is also relevant since, as anthropologists point out, for most of human history humans have been hunter gathers. This evidence suggests both intense knowledge and respect for nature as a whole coupled with a (sometimes) savage utilitarianism.

All of these types of values might need to be accounted for in valuing the potential destruction of nature. There seems however to be no evidence that responding positively to nature has a partly genetic basis.

I get positive benefits from enjoying living in natural surroundings and observing nature. The benefits are amplified if occasionally I can do this alone - I find my own company wonderful at times - where I can, without inhibition, allow my curiosity to roam. I don’t want or need dogs, cats or caged birds to be my 'friends' or to get a sense of nature and/or a biophilia blast.

Friday, July 27, 2007

Policies for reducing the costs of cigarette smoking in Australia

I wrote this paper with Louise Collis. Comments are very welcome.

Abstract: Policies for regulating tobacco smoking in Australia are examined. Cigarette management policies need to account for the addictive nature of nicotine, information failures and the existence of externalities and internalities. The external costs of smoking are low relative to internalised private costs. In so far as externalities do arise they can be addressed by taxes and by direct controls on smoking. If internalised health costs are targeted then taxes and restrictions can be usefully assessed in terms of implied health outcomes. Substitutions toward ‘chop chop’ and compensatory behaviour by smokers restrict the usefulness of taxes while the existence of NRTs and smokeless tobacco products enhance the case for hefty taxes on smoked tobacco. Adverse effects on low income consumers from high taxes can be offset by income transfers from high income consumers. Smoking behaviour among high income consumers can be addressed using non-price deterrence, such as bans. Policy development is complicated by the existence of distinct groups of users who react differently to incentives.

1. Introduction

Most governments intervene to reduce the consumption of tobacco. Australia, along with nearly 150 other countries, has ratified the World Health Organization Framework Convention on Tobacco Control (WHO, 2003), binding it to provide warning labels on cigarette packages, restrictions on where tobacco can be consumed, advertising bans and disincentive taxes. With an estimated 19,019 deaths in 1998 attributable to smoking in Australia (Ridolfo and Stevensen, 2001), there is little argument against the need for some intervention, but some disagreement as to the level and form.

In Australia, the national policy setting framework is set out as the National Tobacco Strategy (NTS) (Ministerial Council, 2004). Its central goals are to improve tobacco-related health outcomes and to reduce the social costs of tobacco use. The aim is not only to reduce the externalities associated with smoking, such as public health costs and passive smoking exposure, but also the internalities – the costs that smokers may not take into account when deciding to consume tobacco. The latter include increased private health costs, reduced paid and unpaid work potential, disability, and early death. In fact the NTS seeks a reduction in gross health costs, regardless of who bears the burden of these costs. The rationale given for the focus on gross health costs rather than external costs alone is that smokers can be irrational and suffer from internalities.

This paper also pursues this objective as well as focusing on external cost. This recognises the fact that reducing smoking is a key social objective, so that an economic question arises as to how to meet this objective effectively and at low cost.

One issue when developing policy is that different groups may react differently. In 2004, there were about 2.8 million Australians who smoke at least once a day and half a million who smoke less than daily (AIHW, 2005). Those who smoke less than five cigarettes a day, known as ‘chippers’, are unlikely to be addicted to nicotine (Shiffman et al, 1995). Studies suggest that, of all smokers, about 7 per cent are chippers, and a further 16 per cent are casual smokers (Zhu et al, 2003), equating to about 650,000 smokers who may be more responsive to smoking disincentives. Over half of the Australian population aged 14 and over have never smoked, while just over a quarter have successfully quit. This group may be considered to be potential users.

In most developed countries the incidence of smoking has fallen dramatically since the 1950s when the connections between smoking tobacco and lung cancer were publicly articulated. In Australia smoking of tobacco products peaked in the 1950s when about 70 per cent of males and 30 per cent of females smoked. Among adult males smoking prevalence dropped from 45 per cent in 1974 to around 18.6 per cent in 2004. Among females it fell from 30 per cent to 16.3 per cent (AIHW, 2006). Before these gains can be celebrated, it should be remembered that globally tobacco use is estimated to kill about 5 million people annually, increasing to 10 million by 2030 (Jha et al, 2006).

Smoking has significant effects on length of life. Doll et al (2004), for example, examine the smoking behaviour of 34,439 male British doctors over a 50-year period and find that long-term smokers died 10 years younger than non-smokers. For men born around 1920, Doll et al found that prolonged smoking from early adult life tripled mortality to 43 per cent among smokers compared to 15 per cent among non-smokers between ages 35-69. Moreover, cessation at age 50 halved the mortality hazard and cessation at age 30 avoided most of it, confirming the huge potential public health gains from quitting.

Smoking is a major risk factor contributing to disease. Mathers et al (2000) evaluate such factors as obesity, unsafe sex, alcohol consumption and smoking for the effect they have on disease and injury as measured in disability-adjusted life years. Tobacco is responsible for nearly 10 per cent of the burden and more than any other identified, avoidable factor.

Part of these health costs is born privately: in Australia in 1998-99 treatment costs borne by individuals were $145 million. Net health care costs borne by government (costs that net out the saving that arise because smokers die early) were $880 million in 1998-99 or about $1054 million in 2004-05 dollars (Collins and Lapsley, 2002). Public health sector costs are therefore much smaller than the tax benefits accruing to the community from cigarette taxes which in 2005-06 amounted to $5.3 billion (Commonwealth of Australia, 2007). This does not, however, imply that taxes are inefficiently high for two reasons. First, efficient externality taxes equate the cost of a good with the social marginal costs. If these social marginal costs are strongly increasing – so damages associated with smoking increase more than proportionately with consumption – then tax revenues collected will exceed external costs. Second, for public financial reasons, taxes on goods such as cigarettes, with relatively inelastic demands, will be large because this helps to limit the ‘excess burden’ of the total tax take.

The NTS claim that one of the major market failures associated with smoking is that smoking is not a free and informed lifestyle choice. First, the health risks of smoking are under-appreciated by smokers as is the reality of nicotine addiction. Moreover, smokers under appreciate the connections between smoking and the incidence of specific diseases. Second, most people start smoking and become dependent on nicotine while young and presumably immature. Further, decisions relating to addictive goods are not easily reversible.

The remainder of this paper is structured as follows. Section 2 considers the addictive nature of nicotine. The question of whether smokers make fully informed choices is further explored in section 3. Sections 4, 5, 6 and 7 look at specific policies, some of which are adopted in Australia. Section 8 concludes.

2. Issues affecting policy development

The addictive nature of cigarettes calls for a distinctive public policy approach compared to non-addictive goods which may nevertheless have the potential for poor information, or yield negative externalities, such as polluting fuels. The nicotine delivered by cigarettes is addictive. This distorts thinking processes and leads to uninformed decisions that may persist. Most people start smoking and become dependent on nicotine while they are young. The addictive agent is much less harmful to health than other components of smoking, such as carcinogenic, tobacco-specific nitrosamines. However when cigarettes are smoked these are inevitably consumed jointly with the nicotine and so cause health damages.

Addicted smokers smoke to satisfy a craving for nicotine. Typically, that craving is met by raising the level of nicotine in the blood to a certain level. This is achieved by consuming enough tobacco products to yield this desired level. This means that ‘cutting back’ on cigarette consumption will typically not be an option for a smoker who wishes to continue to smoke. Thus, the response of most smokers to low-tar cigarettes is to smoke more cigarettes, smoke more of each cigarette, to inhale more deeply or generally to change smoking behaviour to maintain the nicotine levels in the blood. For example, breathing holes in ‘light’ cigarette filters, which mix air with smoke before inhalation, are countered by covering holes with fingers or lips to increase nicotine intake. Any measure to reduce the intake of tar, which simultaneously reduces nicotine intake, is therefore likely to fail. An addicted cigarette consumer compensates for any move to reduce nicotine consumption by changing their smoking behaviour.

For those smokers who find the addiction insurmountable, alternate methods of delivering nicotine to the brain exist. Pharmaceutical nicotine in the form of patches, gum or inhalers, delivers nicotine without the carcinogens and toxins present in tobacco. These can be used to replace cigarettes completely in the case of those who quit, but they can also be used by smokers to reduce the amount smoked. Four studies reported in ASH (2007) of smokers who were interested in cutting down the amount smoked but were not yet ready to quit, found that one in twelve had quit within a year. These studies also showed that in double-blind placebo trials, smokers given NRT were more than twice as likely to sustain a reduced tobacco intake.

The nicotine delivered may nevertheless have some adverse consequences. While having far fewer negative health consequences than smoking, nicotine may be a trigger for cardiac events, may affect a foetus, may be passed through breast-milk, and may reinforce a nicotine addiction in adolescents. Nicotine increases pulse-rate and blood pressure, and slows the release of insulin. The health effects could perhaps be compared to caffeine. Nicotine is not, however, associated with carcinogens, and may be beneficial in some cases, for example in the treatment of Parkinson's disease and Alzheimer's disease (Birtwistle and Hall, 1996).

Smokeless tobacco products such as chewing tobacco and oral snuff have been banned in Australia since June 1991, on the basis that they are ‘known to cause cancer of the mouth’. Nasal snuff, that is now consumed in negligible quantities, is not covered by this same legislation, but is controlled federally in a similar fashion to smoked products, and is banned in five states and the ACT.

A 1988 review by the Trade Practices Commission (TPC) found an association between oral snuff and cancer, but did not support a ban on chewing tobacco or nasal snuff. Despite this, the ban introduced covered chewing tobacco and oral snuff on the basis that they may be unsafe (Quit Victoria, 1995). It was acknowledged that this treatment was different from smoking tobacco and alcohol which were known to be unsafe, but this was not seen to be relevant to the decision. In addition to the health consequences of nicotine, chewing tobacco is associated with mouth cancer, due to the presence of nitrosamines in the prepared tobacco. While smokeless tobacco is not harmless, there is much evidence that it is less harmful than smoked tobacco of the order of 1/1000 to 1/10 of the risk (RCPL, 2002). Phillips et al (2005) show that despite evidence that smokeless tobacco is safer than smoked tobacco, information easily available continues to promote the message that smokeless tobacco is no safer.

A distinction that may be important is between harm minimisation and harm reduction. Undoubtedly, quitting tobacco products altogether minimises harm, but where this is not an option, at least in the short term, chewing tobacco may be a reduced harm option.

It could be theorised that promotion of a good that reduces the cost of smoking may increase the demand for cigarettes. By reducing the cost of quitting, NRTs could induce a moral hazard whereby the probability of potential smokers to consume smoked tobacco is increased. Saffer et al (2007) test this thesis on youth smoking, and find that NRT advertising has no affect on whether a person smokes, but may increase the amount smoked for those who do. They find that a 10 percent increase in NRT advertising is associated with an increase in average cigarettes smoked per day from 5.77 to 5.82. Further, a ban on NRT advertising would have the same effect on amount smoked as a 10 percent increase in prices. This suggests a caution to any aggressive promotion of substitutes.

Most smokers commence smoking when they are young. The NTS (p. 3) suggest that more than 90 per cent of those who currently smoke in Australia begin as teenagers. This is significant because, first, many of those using will become addicted to nicotine and will continue smoking throughout their adult life. Second, there is strong evidence nicotine has particular neurotoxicity costs for young people defined as those aged less than 25 years (Jacobson et al, 2005) even though it is much less toxic for those who are older.

Finally, and more significantly, there is strong evidence of enhanced impulsiveness, and hence of higher rates of time preference at very young ages (Mischel et al, 1992) and initiation of smoking during adolescence is related to impulsiveness (Baumeister et al., 1994, p. 198-199). This suggests use at younger ages is less guided by rational foresight than other factors and strains the case for ‘informed choice’ arguments. The main policy implication of the idea that rates of time preference rates fall during adolescence is to focus the direction rather than level of anti-smoking effort. Strict bans on selling cigarettes to the young, age limits on the right to smoke and advertising campaigns directed at discouraging initiation of smoking are sensible options.

3. Information and internalities

The claim by the NTS that health risks are underappreciated has been challenged by Viscusi (2002) and others, who argue that the risks of smoking are widely appreciated by most people partly because of publicly-funded, anti-smoking campaigns and press coverage of smoking risks. Indeed, this was the basis for the failure of individual plaintiff lawsuits in the United States up until 1990 – jurors consistently concluded that the risks of smoking were well known and voluntarily incurred. Thus non-smokers are not privy to ‘secret information’ regarding the hazards of smoking. Viscusi (2002, Chapter 7) argues that US citizens fully understand the risks of smoking with respect to lung cancer, total smoking mortality and life expectancy loss. With respect to lung cancer risks, which Viscusi estimates to be 0.06-0.13, he found that, in 1998, the overall population forecast this risk at 0.48 while smokers predicted 0.42. Thus smokers overstated the risks of contracting lung cancer by a factor of between 3.2-7 times. Viscusi found this was so both for highly educated and un-educated people. Moreover, people overestimated the effects of smoking in reducing life span confirming that they overstate smoking hazards. Viscusi also provides evidence suggesting that people fully understand the addictive implications of smoking. Most people know that it is difficult to quit smoking once it is initiated.

However people do not identify all of the specific risks of smoking. For example women seem to be unaware that they are particularly susceptible to the health costs generated by smoking. Zang et al (1997) shows that, accounting for differences in body weight, women have higher lung cancer risks. In addition, smoking reduces female fertility. Van Voorhis et al, 1996) shows substantial dose-related ovarian disfunction occurs with smoking. Women are also particularly susceptible to becoming addicted to nicotine. DiFranza et al, (2002) shows that smoking periods prior to initial addiction of 12-13 year olds were 21 days for girls and 183 days for boys. It is also true that passive smoking has severe health costs for children: thus ABS (2006) argue that breathing in of tobacco smoke by non-smokers can lead to harmful health effects in unborn children, and middle ear infections, bronchitis, pneumonia, asthma and other chest conditions in children. It is also linked to sudden infant death syndrome (SIDS). In adults, passive smoking increases the risks of heart disease, lung cancer and other chronic lung diseases.

To some extent these hazards will be emphasised by fostering perceptions that smoking is a generally hazardous activity even if specific health problems are not spelt out. But to the extent that these specific problems are individually significant and under-appreciated the implication is that smoking warnings should target not only general risks of smoking, which are already internalised, but instead be specifically targeted to those particular smoking-related health issues that are underappreciated.

In addition there are specific groups in the community who do not appreciate the risks of smoking partly because they are isolated from the impact of sustained health warning messages. A particular group of concern are Australian aboriginals who have high rates of smoking and widespread under-appreciation of attendant health risks. About 51 per cent of adult indigenous Australians smoke compared to 17 per cent in the non-indigenous population (ABS, 2006). Higher rates of smoking are associated with lower socio-economic status, unemployment and early school leaving which are characteristics of many indigenous populations. Dispossession and dislocation contribute to the low self-esteem which is also associated with smoking. Members of the ‘stolen generations’ are also more likely to smoke than other indigenous Australians. A 1994 survey showed that one third of indigenous Australians erroneously thought it was safe to smoke up to one pack of cigarettes a day (ABS, 1996). Smoking warnings should be adapted to target aboriginals.

Even if individuals on average internalise health risks, there can be a case for specific policies that target specific health problems linked to smoking and to target particular groups who are not receiving the required message.

In addition, there are important aspects of smoking about which individuals seem poorly informed. Cummings et al (2004) argue that smokers may be well-informed about the size of health risks but still not have good information on reducing these risks. Knowledgeable smokers might be prepared to experience a certain level of health risk but still seek ways of reducing that risk. For example, 58 per cent of smokers believe that smoking is made less hazardous by switching to low tar or filtered cigarettes despite decades of research showing the converse (Hastrup et al, 2001).

More generally Cummings et al surveyed 49,593 households of occupants aged 18+ to determine generally what is known about reducing smoking risks. They found:

· 94 per cent of respondents believed they were well-informed of the health consequences of smoking even though their understanding was poor.
· 39 per cent misunderstood or didn’t know the health consequences of smoking, more than half had misleading information on the content of cigarette smoke, the safety of nicotine and the role of additives.
· 65 per cent had incorrect information on the safety of low tar and filtered cigarettes believing they lowered health risks when they do not.
· 56 per cent had incorrect information on the safety implications of nicotine medications believing they were more harmful than they are.
· Most smokers misunderstood the addiction properties of nicotine medication which is less likely to cause addiction and heart attacks than smoking cigarettes. This misunderstanding limits the potential for consumers to reduce their health risks by switching from harmful cigarettes to safer NRT and smokeless tobacco products.

Cummings et al also provide evidence for optimism biases. While smokers estimate community risks adequately they underestimate the risks posed to their own health from smoking. This misperception is partly due to their mistaken belief that they will be able to stop smoking before health problems eventuate.

It is therefore incorrect to claim that smokers have accurate information about reducing the risks of smoking creating a case for public intervention to refine perceptions. A major misperception is the widespread belief that low tar and filtered cigarettes reduce the risks from cigarette smoking but that medically supplied nicotine and smokeless tobacco such as snuff do not. Each of these views is fallacious. Nor is it true that heavy smokers who cut back their smoking, even by 50 per cent, reduce their health costs. Godtfredsen et al (2002) show that over a 16 year period, heavy smokers who reduce their smoking by 50 per cent do not reduce their mortality risk while those who quit to reduce their risk.

Compensatory smoking behaviour explains why there is no reduction in risk associated with reduced smoking. The policy implication is that quitting cigarette smoking completely should be the major policy objective.

4. Policies to counter externalities

The World Bank regards tobacco taxes as the single most important step governments can take to reduce smoking among both young people and adults. The adult demand elasticity is ‑0.4 and for children ‑1.6. Australian evidence supporting this general conclusion is in Bardsley and Olekalns (1999). They estimate short-run price elasticities of -0.2 to -1.5, and suggest that the impact of price is greater than that of anti-smoking messages. Policies that discourage use by increasing the price of tobacco products are therefore fundamental to reducing smoking and thereby to reducing the costs of smoking. These policies are most effective as a tool in discouraging young smokers, chippers and those on low incomes since it is such people who will have most elastic demands.

Surveys which measure preferences for anti-smoking policies show that even smokers themselves support increases in taxes (Gruber and Mullainathan, 2002). This suggests that price increases driven by tax increases have low welfare costs. In 2004, over 65 per cent of Australian ex-smokers supported policies to increase taxes on cigarettes as a measure to discourage use (AIHW, 2005). Moreover, Nakajima (2007) found that peer effects, whereby the smoking choices of friends influences a potential smoker’s choices, strengthens the effect of taxes. If these externalities are taken into account, the effect of taxes may be 50 per cent greater than that measured directly.

However, tax based policies have some adverse equity implications which the NTS recognise. Not only are the poorest quintile most likely to smoke, they also smoke more cigarettes per smoker (AIHW, 2005) and cigarette consumption is a large part of their disposable income. The 2003-04 Household Expenditure Survey found that the while the highest income quintile spend 0.8 per cent of total income on tobacco, the lowest income quintile spends 1.8 per cent. To some extent however these regressive effects are offset by the fact that price elasticities will be higher among those with low incomes. In particular, one response to higher prices among the poor will be increased quit rates and lower levels of consumption. Thus the financial burden of the tax will tend to be borne mainly by those on higher incomes.

Currently taxes are applied on a per stick basis. An efficient tax would be set at the amount of externality imposed, implying that cigarettes with higher levels of harm should be taxed at a higher level. This would also provide incentives for producers to reduce known harmful agents.

Complications of further tax increases include greater use of illegally supplied tobacco (‘chop chop’). The existence of illicit supplies is a serious constraint: the 2004 National Drug Strategy Household Survey reports that 38 per cent of Australians smokers aged 14 and older are aware of unbranded loose tobacco, and of those, nearly 23 per cent have smoked it. The recent acceptance of offers to domestic growers to exit the market will make policing of illicit supplies easier and hence should reduce the supply of unbranded illegal tobacco. In the future tobacco may only be grown in Australia if binding contracts to export it exist.

Smoking bans are a further way of countering externalities by reducing the opportunity for passive smoking externalities to be incurred. Many countries impose restrictions on who can sell and buy tobacco, and where it can be consumed. Smoke-free legislation was introduced in the Republic of Ireland from 24 March 2004, and by 2007 the remainder of the United Kingdom, along with most states and territories of Australia and the United States of America, and provinces of Canada have laws against smoking in workplaces and other public places. In Australia, smoking restrictions in public places such as pubs are regulated by states and territories, with Queensland having the strictest laws, and Northern Territory as the only state/territory with no restrictions in force or due to come in force.

It has been argued that bans on smoking in public places may increase exposure to environmental smoke by forcing smokers to consume at home (Adda and Cornaglia, 2006). However, in Ireland, where smoking has been banned in all workplaces including pubs, surveys show that the introduction of the ban was accompanied by an increase in the number of smoke-free households. Borland et al (2006) similarly found a strong correlation between jurisdictions with smoking bans and lower tolerance for smoking in the home.

The NTS, in its discussion of bans, states that the policy intent is to reduce exposure to passive smoking. While important, this ignores additional positive benefits of bans to smokers. A US survey found that workplace smoking restrictions reduced the amount smoked by a given smoker by ten per cent, and reduced the probability of a worker being a smoker (after controlling for the likelihood that a smoker would choose to join a workplace with a ban) by five percentage points (Evans et al, 1999). More recently, a study of smokers in Greece, where smoking rates rose over the 1990s in contrast to most developed countries, shows that smokers are much more responsive to workplace bans than to price increases (Raptou et al, 2005).

5. Policies to counter information failure

To the extent that there exists an information failure as described in section 3, provision of accurate information about risks and ways of reducing risks is an effective tool. Advertising bans and restrictions on smoking scenes in movies are also useful in reducing positive images of smoking. Labels which misleadingly suggest that cigarettes are safer, such as ‘mild’ and ‘low tar’ are banned.

Smokers should be provided not only with information about the dangers of smoking, but also with accurate advice on how to reduce risk. Cutting down the number of cigarettes smoked or switching to low tar cigarettes can do more harm as smoke is taken deeper into the lungs in an effort to satisfy the nicotine requirement of the addiction.

In Australia, cigarette packs must contain text and graphic health warnings. They may not contain any descriptors such as ‘light’ or ‘mild’. An equivalent to the comprehensive list of ingredients or nutritional information which is required on food products is not only not required, but is not allowed. One difficulty with providing such information is that the amount of toxins consumed depends heavily on the smoking method. A smoker may change the way they smoke, meaning that a cigarette that contains less of a toxin may deliver more to the smoker if other aspects of the cigarette cause it to be smoked differently. Low values of toxins may suggest a cigarette is less harmful even though the compensatory smoking method may make it more harmful. The drawback of not providing any information is that tobacco manufacturers have no incentive to remove or avoid use of toxins.

Federal and state governments support anti-smoking and quit information campaigns, both directly, and through support of organisations such as QuitSA and Quit Victoria. Information is provided through mass media advertising, schools, and printed material. Fully subsidised advice and help can be sought online or by phone. The thrust of advertising is general, but campaigns are also directed at pregnant women, women in general and youth.

6. Policies to promote substitutes

NRTs, and smokeless tobacco are, as discussed in Section 2, lower risk substitutes to cigarettes although they are not completely riskless. NRTs are available over-the-counter but they are not subsidised. It has been shown that NRTs are a cost-effective way to reduce smoking (Wasley et al, 1997); if social costs are associated with smoking cigarettes, an argument can be made for a subsidy. However, in Australia, smokeless tobacco is not only not promoted, but actively discouraged with bans and production and import restrictions. The NTS, in its discussion of smokeless tobacco, concedes that it may be less harmful than smoked tobacco, but is concerned that it may hinder quitting, and form a ‘gateway to tobacco smoking.’

McNeill et al (2001) argue for a complete liberalisation of the market for NRT on the grounds that the alternative to NRT use is even more destructive tobacco consumption. Criticising the risks of consuming NRT alone is not sensible and reflects risk-aversion from the viewpoint that NRT should be subject to pharmaceutical regulation. One suggested approach is to provide NRT to overcome nicotine withdrawal symptoms and to overcome the behavioural side of nicotine dependence and then to break the dependence by stopping use of NRT. According to McNeil et al, minors, pregnant smokers and even smokers with cardiovascular disease should all be allowed to use NRT if the alternative is to continue cigarette smoking. Moreover, NRT at moderately high doses should be made available for long-term use and should generally be made as widely available as cigarettes. Reducing regulatory hurdles that limit marketing of NRT products would provide incentives for firms to produce and develop such products.

While smokeless tobacco and NRT are a more healthy way for a nicotine addict to access their nicotine, a difficulty in promoting such products is that they may reduce disincentives to smoke. Thus if the constraints on initiating a smoking habit are the anticipated long-term health costs that stem from an anticipated addiction to nicotine that is costly to reverse, any substance, such as NRT, which reduces the cost of quitting, might increase the incentive to initiate use, as investigated by Saffer et al (2007) for youth.

Finally, the drug bupropion, marketed in Australia as Zyban, is not a substitute for nicotine, but aids in smoking cessation. It is available on prescription and is subsidised under the Pharmaceutical Benefits Scheme, receiving a government subsidy of over 80 per cent.

7. Other policies to reduce harm

Cigarettes contain a number of known carcinogens which occur naturally during the curing process, and which could be removed. Also, regulating the use of chemicals, pesticides and fertilizers in the production of cigarettes could reduce known toxins. These moves would not make cigarettes safe, but safer. As with the promotion of NRTs, any move to reduce the private costs of smoking may increase use, and this must be taken into account when estimating the benefits of the reform.

Cigarettes are known to cause a number of fires every year. Collins and Lapsley (2002) estimates that cigarette-induced fires cause $52.1 million of tangible costs and a further $28.5 million of costs due loss of life. Reduced-ignition propensity (RIP) cigarettes which do not continue to burn when not drawn have been developed, and there are calls to ban in Australia cigarettes which do not incorporate these features (Chapman and Balmain, 2004).

Sale of cigarettes is restricted to licensed outlets in some states, while in Victoria and New South Wales, for example, so licence is needed. There are limits on the size of advertising, the number of packs that can be displayed and a ban on sale or discounting advertising at place of sale, although these may vary from state to state. Sale to minors (age under 18) is prohibited. Cigarettes cannot be sold singly: the minimum pack size is 20 cigarettes. This discourages non-smokers from experimenting with cigarettes, and in particular makes it more difficult for children to buy cigarettes as they typically have less disposable income.

There have been calls for sale of tobacco to be limited to pharmacies. The NTS points out that cigarettes have a higher retail profile than milk or bread, being available in more outlets. Allowing tobacco to be sold together with everyday items gives the impression that it is a similar product, unlike codeine, for example, which may only be sold by a pharmacist.

Research is being conducted into vaccines which prevent nicotine from reaching the brain. Once the nicotine reward mechanism is broken, the addictiveness of cigarettes is removed. Researchers point out that these vaccines, if effective, may help recent quitters from relapsing, but are not designed as a long-term preventative (Hall, 2005).

For addicted smokers, the aim may be to deliver the necessary nicotine with the least amount of tar, carcinogens and carbon monoxide. In theory this could be achieved with artificially heightened nicotine levels in a low tar cigarette – a mandated minimum level of nicotine. An important drawback is that the cigarettes would be available to potential smokers or non-addicted smokers. Given that an addiction is formed when a stock of nicotine is consumed within a certain time, high nicotine cigarettes would make it easier and quicker for a non-addict to become addicted. This would suggest a recommendation for a maximum level of nicotine.

Penalties are not discussed in the NTS, possibly because most penalties are set by states, although this is also true of bans. Penalties reinforce regulation, and in the absence of appropriate penalties, regulation is not binding. The penalty for manufacturing, selling or supplying chewing tobacco or snuff is 100 penalty units ($10,743) in Victoria (Tobacco Act 1987 s.15), and 140 penalty units ($10,500) in Queensland (Tobacco and Other Smoking Products Act 1998 s.26ZR). This suggests that legislators believe that the harm from chewing tobacco is high. In the state of Victoria, the penalty for selling to a minor is from 2 penalty units (~$200), up to a maximum of 50 (~$5,000). Penalties in Queensland are much higher: $10,500 fine for a 1st offence, and up to $31,500 for a 3rd or subsequent offence, plus revocation of seller licence for up to three years (Tobacco and Other Smoking Products Act 1998 s.10), but this was increased from a fine of $75 in 2005.

A 2002 survey of under-age smokers in NSW found that 22 per cent bought their last cigarette from a retail outlet (NSW DoH, 2004). Similarly, a 2005 survey of Victorian youth found that 23 per cent purchased their last cigarette, and even in the 12-15 age group, 17 per cent of recent smokers indicated that they had purchased cigarettes from retail outlets (Cancer Council Victoria, 2006). This suggests that expected penalties are not providing adequate incentives for licensed retailers to diligently check the age of purchasers.

8. Conclusions

Developing policy in such a complex environment involves trade-offs. While policies have been very effective in reducing the overall numbers of people smoking, there are still huge potential costs and large numbers of new smokers. And while policies are effective for those who are able to quit, for those who find it difficult, the range of alternatives is limited by bans on many nicotine products.

Policy makers are wary of any apparent quick-fixes, and with reason. The low tar campaign which purported to offer a safer cigarette and which was supported by policy makers was shown in many cases to do more harm than traditional cigarettes. Proponents of high nicotine cigarettes (which give the nicotine hit with less of the carcinogenic tar) often ignore the fact that potential smokers are more likely to become addicted if nicotine is more accessible.

Taxes are a simple way to discourage use, but they are regressive, as lower socio-economic groups smoke in greater numbers. Taxes collected more than make up for externalities imposed, but information failures and the addictive nature of nicotine mean that the cost of internalities may be very large.

While the greater aim is to reduce total costs due to smoking, to the extent that private costs are reduced through safer cigarettes or easier quitting, use may increase. Whether this results in a reduction in harm is a matter of measurement.


Action on Smoking and Health Australia (2007), Guidelines for Healthcare Professionals on using Nicotine Replacement Therapy for smokers not yet ready to stop smoking, At: www.ashaust.org.au/pdfs/NRTguide0702.pdf Last accessed 14.05.07.

Adda, J. and F. Cornaglia (2006), ‘The Effect of Bans and Taxes on Passive Smoking’, IZA Discussion Paper No. 2191.

Australian Bureau of Statistics (1996), National Aboriginal and Torres Strait Islander Survey 1994: Health of Indigenous Australians, ABS Canberra.

Australian Bureau of Statistics (2006), Tobacco Smoking in Australia – A Snapshot 2004-05, 4831.0.55.001, ABS Canberra.

Australian Institute of Health and Welfare (2005), 2004 National Drug Strategy Household Survey - detailed findings, AIHW Canberra.

Australian Institute of Health and Welfare (2006), Australia’s Health 2006, AIHW Canberra.

Bardsley, P. and N. Olekalns (1999), ‘Cigarette and tobacco consumption: Have antismoking policies made a difference?’, Economic Record 75:225–240.

Baumeister, R.F., T.F. Heatherton and D.M. Tice (1994), Losing Control: How and Why People Fail at Self Regulation, Academic Press, San Diego.

Birtwistle J, and K. Hall (1996), ‘Does nicotine have beneficial effects in the treatment of certain diseases?’, British Journal of Nursing Oct 24-Nov 13, 5(19):1195–202.

Borland, R., H. Yong, K.M. Cummings, S. Hyland, A. Anderson, and G.T. Fong (2006), ‘Determinants and consequences of smoke-free homes: findings from the International Tobacco Control (ITC) Four Country Survey’ Tobacco Control 15(suppl_3):iii42–iii50.

Cancer Council Victoria (2006), Smoking among Australian secondary school students 2005, Monograph Series No. 59.

Chapman S, and A. Balmain (2004), Reduced-Ignition Propensity Cigarettes: a Review of Policy Relevant Information. Commonwealth Department of Health and Ageing, Canberra.

Collins, D.J. and H.M. Lapsley (2002), ‘Counting the cost: Estimates of the social costs of drug abuse in Australia in 1998–99’, Canberra: Commonwealth Department of Health and Ageing, National Drug Strategy Monograph Series No. 49.

Commonwealth of Australia (2007), Budget Strategy and Outlook 2007-08 Canberra.

Cummings K.M., A. Hyland, G.A. Giovino, J.L. Hastrup, J.E. Bauer JE and M.A. Bansal (2004), ‘Are smokers adequately informed about the health risks of smoking and medicinal nicotine?’, Nicotine and Tobacco Research 6 (Supplement 3):s33-s340.

DiFranza, J.R., J.A. Savageau, N.A. Rigotti, K. Fletcher, J.K. Ockene, A.D. McNeill, M. Coleman and C. Wood (2002), ‘Development of symptoms of tobacco dependence in youths: 30 month follow up data from the DANDY study’, Tobacco Control 11:228–235.

Doll, R., R. Peto, J. Boreham, and I. Sutherland (2004), ‘Mortality in relation to smoking: 50 years' observations on male British doctors’, British Medical Journal 328(7455):1519.

Evans, W.N., M.C. Farrelly, and E. Montgomery (1999), ‘Do Workplace Smoking Bans Reduce Smoking?’, American Economic Review 89(4):728–747.

Godtfredsen N.S., C. Holst, E. Prescott, J. Vestbo and M. Osler (2002), ‘Smoking reduction, smoking cessation, and mortality: A 16-year follow-up of 19,732 men and women from The Copenhagen Centre for Prospective Population Studies’, American Journal of Epidemiology 156(11):994–1001.

Gruber, J. and S. Mullainathan (2002), ‘Do Cigarette Taxes Make Smokers Happier?’, National Bureau of Economic Research Working Paper No. 8872.

Hall, W.D. (2005), ‘Will nicotine genetics and a nicotine vaccine prevent cigarette smoking and smoking-related diseases?’, Public Library of Science: Medicine 2(9).

Hastrup J.L., K.M. Cummings, T. Swedrock, A. Hyland and J.L. Pauly (2001), ‘Consumers' knowledge and beliefs about the safety of cigarette filters’, Tobacco Control 10(84):416-417.

Jacobson, J., J. Krystal, W. Mencl, M. Westerveld, S. Frost and K. Pugh (2005), ‘Smoking Causes Memory and Cognitive Impairment in Adolescents’, Biological Psychiatry 57(1):56‑66.

Jha P., F.J. Chaloupa, M. Corrao and B. Jacob (2006), ‘Reducing the Burden of Smoking World-Wide: Effectiveness of Interventions and their Coverage’, Drug and Alcohol Review 25:597-609.

McNeill A., J. Foulds and C. Bates (2001), ‘Regulation of nicotine replacement therapies (NRT): A critique of current practice’, Addiction 96:1757–1768.

Mathers C.D., E.T. Vos, C.E. Stevenson and S.J. Begg (2000), ‘The Australian Burden of Disease Study: measuring the loss of health from diseases, injuries and risk factors’, Medical Journal of Australia 172:592 –596.

Ministerial Council on Drug Strategy (2004), National Tobacco Strategy, 2004-2009: The Strategy, Commonwealth of Australia.

Mischel, W., Y. Shoda, and M.L. Rodriguez (1992), ‘Delay of Gratification in Children’ in G. Loewenstein and J. Elster (eds), Choice Over Time, Russell Sage Foundation, New York, 147-166.

Nakajima, R. (2007), ‘Measuring Peer Effects on Youth Smoking Behaviour.’ Review of Economic Studies 74:897–935.

NSW Department of Health, Centre for Epidemiology and Research (2004), ‘The health behaviours of secondary school students in New South Wales in 2002’, NSW Public Health Bulletin 15, s-2.

Phillips C.V., C. Wang and B. Guenzel (2005), ‘You Might as Well Smoke: The Misleading and Harmful Public Message About Smokeless Tobacco’, BMC Public Health April 2005, 7 pages.

Quit Victoria (1995), ‘Tobacco in Australia: Facts and Issues’ available at: http://www.quit.org.au/quit/FandI/welcome.htm

Raptou, E., K. Mattas, E. Tsakiridou and C. Katrakilidis (2005), ‘Factors Affecting Cigarette Demand’, International Advances in Economic Research 11(3):275.

Ridolfo B. and C. Stevenson (2001), The quantification of drug-caused mortality and morbidity in Australia, 1998. AIHW Cat. no. PHE 29. Canberra: AIHW (Drug Statistics Series no. 7).

Royal College of Physicians of London (2002), Protecting Smokers, Saving Lives: The Case for a Tobacco and Nicotine Regulatory Agency, Salisbury, London.

Saffer, H., T. Wakefield and Y. McElrath (2007), ‘The Effect of Nicotine Replacement Therapy Advertising on Youth Smoking’, National Bureau of Economic Research Working Paper No 12964.

Shiffman S, J.A. Paty, M. Gnys, J.D. Kassel and C. Elash (1995), ‘Nicotine withdrawal in chippers and regular smokers: subjective and cognitive effects’, Health Psychology 14(4):301–9.

Van Voorhis B.J., J.D. Dawson, D.W. Stovall, A.E. Sparks and C.H. Syrop (1996), ‘The effects of smoking on ovarian function and fertility during assisted reproduction cycles’, Obstetrics and Gynaecology 88:785–791.

Viscusi, W. Kip (2002), Smoke-Filled Rooms: A Postmortem on the Tobacco Deal. Chicago, University of Chicago Press.

Wasley M.A., S.E. McNagney, V.L. Phillips and J.S. Ahluwalia (1997), ‘The cost-effectiveness of the nicotine transdermal patch for smoking cessation’, Preventive Medicine 26(2):271–3.

World Health Organisation, (2003), WHO Framework Convention on Tobacco Control, World Health Organisation, Geneva.

Zang E.A. and E.L. Wynder (1997), ‘Differences in lung cancer risk between men and women: examination of the evidence’, Journal of the National Cancer Institute 88(3‑4):183‑92.

Zhu, S., J. Sun, S. Hawkins, J. Pierce and S. Cummins (2003), ‘A Population Study of Low‑Rate Smokers: Quitting History and Instability Over Time’, Health Psychology 22(3):245–252.

Bracks quits

I empathised with Premier Steve Bracks the other day after his son was arrested for crashing his car when he had been drink driving. Bracks was publicly scathing in his criticism of his son but you could see the deep sadness.

He said he 'felt hopeless and useless, and you can't help feeling a bit of a failure in some ways as a parent.' Now Bracks has quit politics and cited this incident as one of the reasons.

All parents fail in one respect or another and politicians have demanding lives. Bracks has worked out the tradeoffs and made a personal choice that I respect. I wish him the best.

Thursday, July 26, 2007

Happy birthday John!

Prime Minister John Winston Howard turns 68 today. He has been Prime Minister for 11 years and involved in Liberal Party politics for 50 years.

Howard looks fit and intellectually at his full strength - more like someone likely to fight on for a fifth term than someone about to retire as an aged pensioner.

If JWH stays on and completes another term he would be 72 - the age that Robert Gordon Menzies retired as PM.

I am sure everyone in the blogosophere wishes John a happy birthday. But lest anyone should inadvertently forget: Happy birthday John from the blogosphere!

Wednesday, July 25, 2007

Repositioning La Trobe University

The Green Paper Repositioning La Trobe University written by new Vice-Chancellor, Professor Paul Johnson, was released yesterday.

It is discussed in this morning’s Age and Australian newspapers. The Age continues its campaign to denigrate LTU with a totally negative report – it never misses an opportunity to do this. The Australian’s discussion is more positive and helpful.

The main ideas of the Green Paper - as discussed in the press - are to consolidate courses and to cut teaching time by 25% by cutting out small enrolment units. Also teaching only positions would be available thus releasing staff to do more research. Moves to promote more graduate level programs across the whole university will be accelerated.

It would be inappropriate for me to comment on the content of the VC’s report in a public forum – it’s only a discussion paper at this stage anyway - but I am impressed with the way he is addressing himself to the issues faced. He is promoting discussion throughout the university and even talks about starting an in campus blog.

The university faces some tough choices but having a VC who is intelligent and active provides a sense of renewed optimism.

Tuesday, July 24, 2007

Should we change our government?

Even as a partisan in this debate I still feel it is worthwhile to ask a basic question. Would we be better-off with an experienced Howard Government or with a broadly similar, though less experienced, Rudd Labor Government? The arguments I have seen favouring Labor often seem negative – reasons for not voting for the Coalition rather than a strong preference for Rudd’s team.

Rudd is certainly trying hard not to offend and is offering a ‘small targets’ policy but why then throw out an experienced party. Will Labor provide better economic management? What will it do better?

Some of the criticisms of the Coalition are that it is a slow on implementing a reform agenda and that its age has made it run out of ideas. Despite WorkChoices I think there might be some point to this though it would be surprising to me if the mass of Australians saw the lack of a reform agenda as a reason to vote against the coalition.

By the way Labor’s last spell in office (13 years) was longer than John Howard’s current term. The age of John Howard himself (68 in two days) seems an irrelevancy.

There are also specific issues such as Australia’s involvement in the unpopular involvement in the war in Iraq and the claimed untrustworthiness of the Government (Tampa, AWB etc.). This issues are often discussed by the left but I am unsure if it is accurate or if it reflects general community attitudes. Would the electorate appreciate a repudiation of the American position in Iraq with all that that would imply?

The most disappointing aspect of Coalition policies to me has been the continued lack of emphasis on tertiary education and on producing a first-rate university system. At a time when investment in education is more important as it has ever been – we will never be competitive with countries like China in mass produced manufactured goods and we cannot operate purely as a rural and mineral products exporter - I think we are not showing foresight. It would be better to be marginally over-investing in education than under-investing as we are.
How will a Rudd government improve the Australian education system?

Finally, maybe there are no sensible reasons for change other than the view that a change once in a while is a good thing. While the long spell of economic progress that has been enjoyed by the Coalition should operate in its favour there might also be the feeling (as Paul Keating has remarked) that it is an inexpensive time to make a major political change. The economy is in good shape and we can afford a few adjustment costs.

What do you think? What is the main reason you will vote as you will? Will tou be voting for a different party this election?

Try to keep your response as free of polemics as possible.

Fat taxes - regressive & ineffective

This paper examines the case for leving fat taxes via dairy products.

The conclusion:

In an attempt to improve the nation's health, many U.S. policy makers have or are considering imposing taxes on the fat in food. Dairy products constitute a large portion of at home fat consumption of particularly harmful types of fat, and nearly all U.S. households consume these products. We estimate a demand system for dairy products, which we use to simulate substitution effects among dairy products and the welfare impacts of fat taxes on various consumer groups. We find that even a 10% ad valorem tax on the percentage of fat would reduce fat consumption by less than a percentage point. Given that the demand for most dairy products is inelastic, a fat tax is an effective means to raise revenue. However, these fat taxes are unattractive because they are extremely regressive, and the elderly and poor suffer much greater welfare losses from the taxes than do younger and richer consumers.

This doesn't surprise me although the objective of the inquiry - fat rather than sugar - does a little. A tax on softdrink - consumed mainly by youth with relatively more elastic demands might have greater impact and do more to address obesity issues.

Monday, July 23, 2007

World weight loss record

Did he look better? Well, yes, but it took a bit of cutting & stitching.
Thanks LC

Hysterics everywhere: Give the Haneef issue a break

The press and the infantile, leftwing blogosphere are having a field day making conjectures that foster views of the innocence or guilt of Mohammed Haneef.

In part this might have been triggered by what seem to be failures in the methods of investigation and in the accuracy of information transmitted by the Australian Federal Police. I say ‘might’ because the more plausible conjecture, given track records, is that this case gives those on the left and in the press the opportunity to manufacture hysteria and concoct foolish, conspiracy theories.

Over the weekend it was suggested that the SIM card was not discovered in the vehicle associated with the bombing. More seriously, NewsCorp papers published an unsourced ‘police’ claim that Haneef was receiving flying lessons and was planning to bomb a Gold Coast high-rise building. The AFP have taken the extraordinary step of denying this claim and the claim that they were the source of this story. Haneef’s solicitor has thrown fuel on the fire by describing the claims as ‘extraordinary’ and protesting at a public rally.

Australia is fast becoming a nation of hysterics who rant over perceived injustices and perceived moves toward totalitarianism even when faced with a possible investigation of a threat of terrorism to our citizens. To the know-all peanuts who pursue this line: Let the AFP and the courts do their job. Have a non-adolescent level of patience and keep a sense of proportion.

Denigrating the AFP, indulging in conspiracy theories and, most importantly, trivialising the pursuit of terrorist saboteurs in Western democracies is irresponsible behaviour.

The events in Italy over the weekend, where the imam of a mosque and two aids have been arrested for training terrorists, confirm that it makes sense to be careful. Terrorism is neither a joke or an evil scheme concocted by conservative politicians faced with a difficult electoral situation. That this is true is evidenced by the support given by senior Labor Party politicians to the actions of the AFP and the Government.

If Haneef is innocent he will be released and can go (or be sent) home. A mistake will have been made in the sense that a mistake is made with any unsuccessful prosecution. If he is guilty then that will be established by the courts. Its a judical system with a presumption of innocence where the innocent get acquitted.

Haneef is not being tortured or being sent to the gulag. He was an associate of people now recognised to be terrorists and is being investigated in a reputable legal system where he will get a fair trial. Leave it at that.

Passive smoking causes health damage

Yobbo suggested in response to an earlier post that there was convincing evidence that passive smoking was not linked to higher incidence of tobacco-related disease. This is an important argument in the context of tobacco regulation since one motivation for bans on smoking in bars and in the workforce is to reduce the health costs of smoking.

Yobbo cited a paper in the prestigious British Medical Journal by Enstrom and Kabat (2003) which, on the basis of a study of 118,094 US adults either married to ‘ever smokers’ or ‘never smokers’, concluded that there was no connection between environmental tobacco smoke and tobacco-related mortality.

A difficulty with this study was that it started in 1960 when smoking was widespread in the workforce so that other sources of passive smoking would impact on non-smokers than having a spouse who smoked. In addition the study ignored quitting behaviour. Both of these factors would tend to understate the impacts of passive smoking on health. You really need a more direct measure of exposure to passive smoking.

There were many other criticisms of the Enstrom/Kabat paper. Indeed the paper generated a vast response of furious indignation partly motivated by the fact that the authors received funding from the tobacco companies. In the view of some research funded by the tobacco companies should not even be published because of fears the companies are attempting to implant 'seeds of doubt' that will distract from the impact of well-justified health warnings. The editors of BMJ did not accept this reasoning and nor do I.

If the Enstrom/Kabat studied is to be refuted it needs to be done using scientific reasoning or on the basis of the types of objections raised above.

The Enstrom/Kabat studied has in fact been seriously challenged by subsequent work. In particular the study was challenged by Whincup et al. (2004) who accounted more satisfactorily for passive smoking impacts by linking measures of passive smoking exposure (serum cotinine concentrations) to coronary heart disease and stroke incidence among 4729 male non-smokers. Cotinine is a metabolite of nicotine that can be used to directly measure passive nicotine exposure. Whincup et al. found substantially elevated heart disease risks among non-smokers – at the highest cotinine levels these risks were elevated 58% although there were no consistent linkages with strokes. Even low levels of cotinine concentration indicated much higher relative heart disease risks of 45%.

The use of cotinine measures to assess the impacts of smoking bans has been pursued by authors such as Adda & Cornaglia (2006) to quantify the effects of smoking bans in public places. They found that bans on public transport and in schools decrease exposure of non smokers but that bans in recreational public places increase exposure by displacing smokers to private places where they contaminate non-smokers, especially children. Others studies (Farkas et al. (1999)) argue that workplace and home smoking bans increase incentives to quit smoking.

Sunday, July 22, 2007

Backyard birdwatching - 50 species seen

I keep a tally of the bird species I see from my home in suburban Ivanhoe in Melbourne. Keeping a watchout is part of the great art of pottering around the garden with no specific purpose but managing to fill in many a lazy day. It is also an outstanding way of confirming my 'nerd' status with teenage daughters and disbelieving neighbours.

Remarkably, with the breaking of the drought and the spell of cold weather I have seen 4 new species over the past few weeks – Grey shrike-thrush, Eastern yellow robin, Grey fantail and Musk lorikeet. I had not seen a new species from my home for about a year before that. All of these new birds are reasonably common species in the bush areas around Melbourne but I have never seen them from my house in the 10 years I have kept a tally. The 4 new species take my tally from the house to the half-century mark. My life list of Australian birds seen is a fairly pathetic 550 species.

I think that is amazing outcome for the middle of Melbourne suburbia and a tribute to the conservation efforts of our local Banyule Council who have done such a good job promoting tree planting and nature reserves in the district. The species I have seen are:

1. Australian wood duck (in swimming pool)
2. Pacific black duck (many times, one with ducklings in swimming pool)
3. White-faced heron (flying over)
4. Australian white ibis (flying over)
5. Peregrine falcon (swooping at distance)
6. Masked lapwing (rare)
7. Silver gull
8. Crested pigeon
9. Spotted turtle dove
10. Yellow-tailed black cockatoo (now common, formerly rare)
11. Gang gang cockatoo (once)
12. Sulphur-crested cockatoo
13. Galah
14. Rainbow lorikeet
15. Musk lorikeet (now common).
16. Australian king parrot (rare)
17. Crimson rosella
18. Eastern rosella
19. Red-rumped parrot
20. Fan-tailed cuckoo
21. Laughing kookaburra
22. Superb fairy wren
23. Spotted pardalote
24. White-browed scrubwren
25. Striated thornbill
26. Brown thornbill
27. Red wattlebird
28. Little wattlebird
29. Noisy miner
30. White-plumed honeyeater
31. New Holland honeyeater
32. Eastern spinebill
33. Eastern yellow robin
34. Grey shrike-thrush
35. Grey fantail
36. Willie wagtail (have not seen this common urban bird for 4-5 years)
37. Magpie lark
38. Black-faced cuckoo-shrike
39. Grey butcherbird
40. Australian magpie (white-backed)
41. Pied currawong
42. Australian raven
43. Little raven (flying over)
44. House sparrow (now quite uncommon)
45. Welcome swallow
46. Silvereye
47. Song thrush
48. Common starling
49. Common myna
50. Common blackbird

The mammals I have been, by the way, include:

1. Grey-headed flying fox.
2. Ring-tailed possum.
3. Brush-tailed possum.

Saturday, July 21, 2007

What I am reading: Ayaan Hirsi Ali

Ayaan Hirsi Ali’s Infidel revealed much about a woman’s early life in repressive Somalia, Saudi Arabia, Ethiopia and (to a less extent) Kenya. It reveals her joys as she discovers the advantages of living in an open, wealthy society, Holland, where she can work, study and enjoy friendships and romance to an extent impossible in her earlier constrained life.

Most of all, this book reveals her sense that the West does not appreciate the threat that the mindless tolerance of intolerance poses. People who have no tolerance for alternative viewpoints, who threaten dissenters with death and who claim cultural freedom (with hypocritical cries of ‘racism’ and ‘prejudice’) to express their own bigotry, are unwanted in any society.

AHA’s early life looks nightmarish to an external western observer. Indeed it would like look very attractive to any young woman aware of even limited alternative possibilities. Life is materially poor- without much variety and there is a miserable lack of personal freedom, a lack of non-rote-learning education, a lack of personal honesty coupled with an exceedingly harsh family life and, at the social level, a generally atrocious treatment of women and girls.

The mutilation of AHA’s genitals is that part of her story that has received most publicity but it is only a minor part of the tale related here.

The more general story is one of oppression and denial of her most basic human rights. These societies she describes use the words ‘no’ and ‘sin’ excessively to drive much of life which is consequently a boring, drag. That’s why so many people from these societies want to exit and join the very societies their religious leaders so forcefully condemn. They are suffering human beings who carry repugnant social attitudes as baggage with them.

AHA, during her adolescence, accepted the religious and social repression because she knew no alternative. She suffered from the ‘caged bird syndrome’ – even if the door is open she wouldn’t (or couldn’t) fly. For much of the time she sought to establish Islam as the basis for her life – indeed she became unusually religious. Like many adolescents she sought the internal stability that highly structured religious belief seems to provide fanatics who accept its premises dogmatically. The questions she asked about the consistency of various religious beliefs troubled her, in part, because they were not sensibly responded to. As an adolescent I can remember asking the same types of questions to Christian ministers and experiencing frustration that they were also not answered.

But, to AHA, there are differences between a modern Christian upbringing and a fundamentalist Islamic upbringing because, under the latter, there is no personal dialogue within the religion. With the fundamentalist approach religion is a matter of learning the truth as it is presented by God in an ancient text – no role for individual understanding here. Even understanding is inessential – as evidenced by the Somalian requirement that AHA rote learn large slabs of the Koran in Arabic even though she understood almost none of the language. It is stupid.

AHS’s stories reveal interesting vignettes of fundamentalist societies. Their ignorance of other societies, their bigotry and hatred of new ideas, the use of religion to validate oppressive power structures and, most of all, their ignorance. Some of the insights into the rationale for the repression of women under Islam were almost humorous . I recall the notion that if female sexuality were not repressed society would disintegrate and even the bus service would fail as oversexed bus drivers collided with one another! This bullshit is, on reflection, a great way of rationalising oppression.

When AHA went to live in Saudi Arabia she was addressed as the ‘black slave’ by her devout religious teachers and the worm started to turn. She saw women locked in their homes, beaten by their husbands, trapped into loveless marriages with joyless sex and with men they despised. She saw a religion that paid no respect to other religions while demanding it be respected. It was a religion which blamed the ills of the world, and its own failure to establish prosperous, liberal societies anywhere, on ‘long-nosed’ Jews – they crop up everywhere – even ‘Saddam Hussein’ was a Jew! But despite this transparent nonsense AHA remained a devout Muslim and saw the Saudi’s as distorters of religious truth not as indications of the unsoundness of the underlying religion. Indeed she reluctantly accepted an arranged marriage with a man she thought was a traditionalist moron just to please the father she (to my mind) inexplicably idolised. On the way to join this man in Canada she dumped this dummy and fled to Holland where she lied to get her political asylum. I’ve got to say I was overjoyed with her successful deception.

AHA learnt Dutch and got a political science education in Holland. One of the jobs she took to fund her education was working as a translator for abused female refugees - almost all of whom came from Islamic countries. Her attitudes accordingly hardened. Her path to becoming an atheist outright was based on her rejection of her earlier view that it was particular ignorant people who were distorting Islam – to the contrary she saw the religion itself as condemning women to a subordinate role, preaching violence not peace and trapping societies in poverty and despair. This gave rise to the bashings and the female oppression.

AHA’s life in Holland convinced her there was a better alternative – the Western, liberal values that most of us take for granted, provided a more satisfactory way of living and a better way for her to pursue happiness.

The book closes as AHA’s colleague Theo van Gough (director of Submission) is murdered by a cowardly Islamist who threatened that AHA would be killed next. The response of the western left, even in Holland, was firstly to condemn AHA for criticising Islam for not embracing ‘multiculturalism’. This inappropriate guilt by Westerners resulting in the victim of oppression being attacked not the murderous, intolerant, misogynist thugs who sought to kill her.

This response made me feel slightly ill – I am sure the same would have happened in Australia given the same circumstances.

When left wing bloggers and Muslim fanatics denounce AHA as an extremist with a chip on her shoulder and use ‘cultural relativism’ arguments to support Islamic oppression of half of humanity they are just wrong. Despite horrific treatment at the hands of her immediate family AHA loves her parents and does not hold them responsible for her misfortunes.

AHA rejects Islam and has moved on. She is not a fanatic at all. I think she is an attractive, balanced person – good looking, self-honest, intelligent and self-reliant. When she opted out of Islam she was a young woman seeking to choose the direction of her own life and making informed, if risky, choices.

I strongly liked her – and, oddly, she reminded me of me.

Friday, July 20, 2007

Tobacco ban blows ill wind

Passive smoking is dangerous – particularly for young children but for anyone – so the Victorian Government has just joined other states in banning smoking from bars, pubs and hotels. My view is that this will be good for business because most adults are non-smokers and even 60% of smokers want smoking banned in such establishments*.

But I didn’t account for the body odour, beer-induced- flatulence factor. According to The Age this morning (Tobacco ban blows ill wind as pubs scent new dilemma) some bar users regret the lost smell of tobacco in the air because patrons can now smell each other. Smoking they claim usefully masked this smell!

It’s a second-best problem – eliminating one distortion (the tobacco smoke externality) reveals another one that is even more offensive to patrons (human smells). It’s a bit like cleaning up pollution to reveal a more serious greenhouse gas problem – global dimming! Not quite a neat analogy however as these new smells don’t kill you.

But they do reduce the attraction of these venues. I guess there are co-ordination problems in trying to persuade patrons to take the occasional shower and quite a bit of stink will be endogenously generated by the beer and the dance floor.

Capitalism steps in to provide a solution.

‘The unforeseen side effects of the tobacco ban have spawned a range of new products about to be tested by the Victorian hospitality industry.

Instant RockStar director Margie Ardono said the company had smelt an ill wind and developed a scented gel that could be circulated through air-conditioning ducts.

"We have produced a product with tea-tree oil that has been tested by Monash University and proven to eliminate smells, while killing common bacteria" '

Apparently vanilla, rosemary, cinnamon, strawberry and banana are popular that help to overcome an array of unwanted aromas. Why am I so amused by all this?

* The economics of such bans are discussed in P.D. Jacobson & L.M. Zapawa ‘Clean Indoor Air Restrictions: Progress and Promise’ in R.L. Rabin & S.D. Sugarman (eds) Regulating Tobacco, Oxford University Press, Oxford, 2001. Generally the economics of bars in the US (California, Massacusetts and New York City) improved.

Thursday, July 19, 2007

Arrow & Schelling on global warming

Economists’ Voice publishes two short articles on climate change by Nobel Prize Laureates in economics, namely Kenneth Arrow (Nobel Prize 1972) and Thomas Schelling (Nobel Prize 1995). Both are good reading.

Kenneth J. Arrow "Global Climate Change: A Challenge to Policy".
http://www.bepress.com/ev/vol4/iss3/art2 (try here).

Arrow is an economist I admire. He writes quantitative economics beautifully and, like so few modern practitioners of this technical art, always sets out clearly the problem he is addressing so that non-specialists can appreciate the main idea. He also picks good problems to address.

Interestingly Arrow had a background in meteorology and worked as a weather officer in the US military. He first became aware of the influence of people on global temperatures in 1942!

In this article Arrow explains why something must be done to limit global warming even if (I don’t think it did) the Stern Report inadequately discounted future costs. He shows that the present value of benefits from mitigation of the ‘high climate’ outcome in the Stern Report – the outcome he considers most plausible - exceed costs even for very high rates of time preference – up to 8.5%. Action to deal with climate change is robust with respect to choice of discount rate.

Thomas C. Schelling "Climate Change: The Uncertainties, the Certainties and What They Imply About Action".
http://www.bepress.com/ev/vol4/iss3/art3 (try here ).

Schelling argues although the uncertainties regarding climate change are many, the certainties create certain urgencies and inaction is an extreme position; he emphasizes technological advance and governmental sponsorship.

Schelling is the one of the leading game theory and strategic thinkers of the twentieth century. Like Arrow he is again excellent at expressing technical ideas in language – indeed unlike Arrow he often uses no mathematics at all. I heard him speak on the Iraq war earlier this year.

Schelling outlines all the uncertainties that plague the analysis of climate change effects but emphasizes the things we do know. We do know that warming is occurring but not how fast. This implies a strong case for R&D programs and for providing economic incentives that encourage a shift away from fossil fuels. The R&D will necessarily involve multiple government since the benefits will not be internalized by private firms and benefits/costs accrue to all nations. Schelling favours research into ‘geoengineering’ of the atmosphere by implanting sulphur particles in it to offset the effects of warming.

Schelling rejects extremism. Both the precautionary principle (act now regardless of costs) and the idea that we should postpone action until damages are certain don’t make sense. Instead look at costs, benefits and probabilities as best known and act in most cases on the basis of taking a sensible insurance policy.

Wednesday, July 18, 2007

Cigarette century

This remarkable graph from W. Weiss, ‘Cigarette Smoking and Lung Cancer Trends: A light at the end of the tunnel?’, Chest, 111, 1997, summarizes much of what we know about the health history of the cigarette in the twentieth century.

The graph shows percentages of the US male population that smoke compared to male lung cancer rates per 100,000 per year. It’s a pity the graph isn’t extended back another 20 years to about 1900 – data is available – it then illustrates, even more dramatically, the full extent of the cigarette catastrophe. In the early part of the twentieth century smoking cigarettes was a minor part of total tobacco consumption and, correspondingly, lung cancer rates were very low. Cancer rates rose from a low base through to 1920 as the cigarette habit caught on. Rates of male smoking peaked in 1959 and rates of female smoking peaked around 1965. The incidence of lung cancer peaked for both groups about 20-30 years later.

What was interesting was that the connection between cancer and smoking was clearly evident in studies published in the early 1950s. Rates of smoking started to decline soon after that. Cigarette consumption, despite the record of horrific health implications, has shown remarkable resilience but it is gradually fading at least in developed countries.

I recalled this graph because I have been reading the monumentally scholarly account of cigarette smoking in the twentieth century by Allan Brandt, The Cigarette Century, Basic Books, New York, 2007. It’s the most enthralling book I have read this year in many dimensions. I’ll blog on it when I get the time – it’s a serious read.

I liked this book because, first, it provides a fascinating account of the development of a major industry. In 1910 the tobacco industry in the US consisted primarily of one firm, the American Tobacco Monopoly which stood, after US Steel and Standard Oil, as the third largest corporation in the US. Not a bad performance given that 30 years earlier cigarette smoking was virtually unknown in America. Second, the book provides a fascinating account of how modern epidemiological studies, using data from the field, helped to identify society’s most serious public health risk. Infectious diseases had largely been replaced by chronic diseases so methods of analyzing the causes of disease also needed to change. The book also analyses the political and legal responses to the cigarette disaster.

Cigarettes were first smoked in Spain in the early 17th century. They were of poor quality – they fell apart – and their consumption was restricted to the down-and-outs. The French however took to them and built a factory in 1840. However consumption in the US and England was negligible through to the 1880s - the British thought them effeminate compared to cigars, pipes and snuff. Another factor mitigating against their widespread use was their cost – they had to be hand rolled. In 1880 a technological discovery by a Mr. Bonsack provided the means for mass production and James ‘Buck’ Duke, a small tobacco producer, eagerly adopted this innovative machine. As the first adapter of the machine he obtained it for a reduced license fee and thereby produced cigarettes much more cheaply than his competitors. He made a fortune and reinvested a substantial fraction of profits in marketing.

By 1920 cigarettes had come to dominate patterns of tobacco consumption in most countries.

In the early 1960s the British and American governments endorsed major reports, dating back to 1950, confirming the definite link between smoking and lung cancer. The cigarette companies initially denied the link but, by the end of the century, could hardly deny what their own internal scientific data (released under duress) showed. Namely that nicotine addiction drives cigarette sales and there is incontrovertible evidence that smoking is the primary cause of lung cancer and a major risk factor for coronary disease. These documents revealed that, all along, these cigarette producers were deliberately marketing to children and that they knew passive smoking was injurious. It is a fact that one-third of all lung cancers among non-smokers are caused by passive smoking - 3000 passive smoking deaths per year in the US.

The foolish libertarian view that individuals knowingly take risks is the only leg the tobacco companies can now stand on. This is an excuse the tobacco companies themselves introduced as a defence of their industry once the health risks of smoking became incontrovertible. It is a foolish defence because most smokers begin smoking at young ages – the average starting age in Australia is 15.9 years – when young people are at their most impulsive. Impulsivity helps young people to experiment and to begin to cope with and develop adult life roles, but unfortunately it also leaves them prone to various chemical experimentations and addictions. Smoking is a paediatric disease.

Given the dramatic recent declines in youth smoking in both the US and Australia in recent years one hopes that the comparatively brief and disastrous cigarette smoking experience will eventually come to disappear in all countries. In developing countries however the problem is spiraling into a catastrophe of huge proportions - dominating AIDs and other disasters by a mile. Of the world’s 1.1 billion current smokers, 80% live in poor or middle income countries – by 2030 developing countries will claim 70% of cigarette-related deaths. Far more people will die from smoking in the 21st century than in the 20th century and, by 2020, fully one quarter of all deaths in the world will be tobacco-related.

Think of this: 100 million Chinese men currently younger than 29 will eventually die from smoking. Its an amazing statistic.