In this weekend's WSJ Weekend Edition the "Numbers Guy" looked at studies that tried to calculate social costs of crime and drugs. According to a study from Iowa State University, a murder costs society $17.25 million. One of the key researchers of the study said the number could be inflated due to double counting but either way there is a large social cost. In a study that Duffka found more interesting, the social cost of a pack of cigarettes--$150. The Spanish economist used high risk jobs and their pay to equate life expectancy and the social cost per pack. There are definitely arguments regarding this process of research but the main point is the concept of social costs per pack. Obviously second hand smoke is a negative externality, but what about increased healthcare costs, lost productivity, household impact, etc? The article ends with the statement that of all the drugs alcohol has the largest social cost. The original article is here if your interested: WSJ
Due to this study and others how would young budding economists (like my readers)recommend a reduction in social costs of alcohol and cigarettes?
I think having raising the tax by a big margin would inspire some to try to quit, which would lower the amount of smokers. Having a designated smoking zone reduces the amount of second hand smoke.
ReplyDeleteI think that if the price is that high, it should just be illegAl to smoke. Althoughnthat wouldn't get rid of smoking in the society, it wools cut down on it.
ReplyDeleteSince alcohol and cigarattes are negative externalities, we could impose a higher tax to reduce the spillover costs to society. Banning alcohol and cigarettes would just cost the government tax revenue, and also create a black market for the good.
ReplyDeleteYou could induce a tax on cigarettes because second hand smoke is an externality and a higher tax would make it harder to purchase cigarettes and kill people and others around. Also if you give subsidies to get people to stop drinking or smoking, the social cost would decrease if you encourage people to stop buying drugs and alcohol.
ReplyDeleteRaise the taxes or make it illegal. There is no way to fully stop smoking or drinking because when there is demand there is going to be supply.
ReplyDeleteI would either place a tax on cigarettes or make them illegal. If they are illegal, people would still want to buy them and find ways to buy them. Because of the lower supply, the price should be higher. But this price will probably not be higher than the taxed price. if we tax cigarettes to make up for the social costs, they would be about $150 a pack. I think this would bring down the demand for cigarettes and in the end be better.
ReplyDeleteTax cigarettes because cigarettes are a negative externality. In order to reduce negative externalities, we must tax.
ReplyDeleteYou should raise the taxes. If you make it illegal, that will not do anything because there will still be a demand for it so there would still be supply.so if you raise the taxes it might make it more difficult for people to purchase the alcohol and cigarettes.
ReplyDeleteIn order to reduce the social costs of alcohol and cigarettes, I think that cheaper alternatives to alcohol and cigarettes should be produced that give the consumer the same effect. I don't think that trying to lessen the amount of cigarettes being sold is going to be effective, and I say this because most people are going to smoke cigarettes despite they are to obtain. In my mind, the only recommendations that I can think of that may be effective in reducing the social costs of cigarettes are either to come up with substitutes for them or make a courageous move and make cigarettes illegal throughout the United States.
ReplyDeleteI think that taxes would decrease the demand on any good, but unless the tax is outrageous like a $150 price for a pack of cigarretes then it won't really matter.
ReplyDeleteSince cigarettes and alcohol are a negative externality,. But the reaction from the smokers and drinkers could really affect the society. Raise taxes
ReplyDeleteMaking smoking illegal wouldn't eliminate smoking, and the money involved in the acquisition of cigarettes wouldn't benefit the economy. A large tax on cigarettes would discourage the habit of smoking while still allowing it to bring revenue to the economy.
ReplyDeleteThe high social cost of smoking kind of makes sense due to the consequences, however I don't see the benefit to stating how much it is. Smokers may not quit just because they cost society that much per pack.
ReplyDeleteI would recommend that government raise taxes to create larger costs for alcohol and cigarette users. The government and some private interest groups could also create public service announcements that outline the hazards of cigarettes and alcohol for the consumers.
ReplyDeleteNormally if a product costs society this much money, we would make it illegal. But making it illegal doesn't stop smoking, because where there is a demand, there will be a supply. There's essentially no stopping smoking, but I think bringing up the price to what it costs to society, a lot less people would buy cigarettes if it costs the consumers 150 dollars a pack
ReplyDeleteI think that alcohol hurts society more than sigarets, especially obusing of alcohol. People's productivity decreases, they become sick more often so less productivity and higher health care cost. Also it really affects their families much more than sigaretts and has more consequences behind it.
ReplyDeleteTo reduce social costs you could make designated areas to smoke that would be ventilated to reduce second hand smoke. You could also tax cigarettes more to reduce the number of them available. Also make a limit on the number of cigarettes you can buy like the pollution credit things.
ReplyDeleteTo reduce the spillover costs, government should impose a tax. You can't just prohibit alcohol since there will always be a demand for it and even if it is prohibited, there will still be a market for it.
ReplyDeleteBy highly taxing alcohol and cigerettes the demand for them will decrease. Also by charging for access to smoking areas will decrease the use of cigerettes.
ReplyDeleteA tax on alcohol and ciagarettes would discourage people from buying them. This would reduce the negative social cost to society
ReplyDeleteSince both cigerettes and alcohol are negative externalities government could impose a higher tax on these items which would reduce spill over costs.
ReplyDeleteSince cigarettes and alcohol have spillover costs, they are over allocated and in order to correct this overallocation of resources, the government should place a higher tax on them to reduce their supply. Also, by subsidizing consumers for nicotine patches in order to increase the demand for them and hopefully reduce the demand for cigarettes in the future.
ReplyDeleteA simple solution is to tax both alcohol and cigarettes even more, enough to make up for the social cost of doing both those things. Completely banning alcohol and cigarettes would harm the economy too much but limiting how much smoking or drinking can be done everyday can also reduce the negative externality.
ReplyDeleteTo reduce the social cost of alcohol and cigarettes, they should raise taxes, and possibly make it illegal to use it to reduce the use of these products
ReplyDeleteTo reduce social costs, it is pretty complicated. We have already banned smoking in almost all public areas and that doesn't help 100%. Although, it reduces secondhand smoke people still smoke around the areas and it travels. But to do this we could keep raising the tax on drugs and alcohol. Also, I feel like if we make drugs legal and put a huge tax on them it would reduce the usage because people wouldn't go through the trouble to get them from other countries cause they're right there.
ReplyDeleteSince smoking creates a negative externality it is an over allocated good. Therefore a tax would decrease the quantity of cigarettes in society and correct the negative externality.
ReplyDeleteMaking cigarettes and alcohol illegal won't make the problem go away. I think it would actually increase our negative externalities. So raising the price of taxes would be a better way to deal with the problem. The government would make money from the tax and less people would smoke and drink, reducing the negative externalities.
ReplyDeleteSince alcohol and cigarrettes are inelastic goods, taxing these drugs wouldn't greatly reduce demand. However, since these produce negative externalities, a high tax on both would provide the government with enough revenue to offset the spillover costs with services like counseling, advice on quitting, subsidizing nicotene patches, etc.
ReplyDeleteTo reduce the negative externalities and eliminate spillover costs, the tax on cigarettes and alcohol (as well as other drugs) and the fines for murder should be greatly increased. If cigarettes cost $150 per pack, the social costs would equal the social benefits because the equilibrium quantity would be much lower.
ReplyDeletethe government could tax alocohol and cigarettea, but since addicta demand is fairly i elastic, this tax wouldnt change demand for some people. so te ogvernment should also subsidize nicotine patches ans AAA sessions for addicts. this wouls reduce demand for these negative externalities
ReplyDeleteTo reduce the spillover costs of alcohol and cigarettes an increase of taxes would help to correct the overallocation. If we try to ban them, it will only be a repeat of prohibition, but possibly on an even larger, more harmful scale.
ReplyDeleteRaising the taxes would make it harder for people to to purchase them. If you
ReplyDeleteMake them illegal people are stalk going to find a way to get them just like they do with everything else that's illegal. I think to help with second hand smoke it would be better to make areas where you can and can't smoke like they do at restaurants and amusements parks.
Due to the negative externalities of drugs and alcohol, an increase in tax will not only benefit the government, but it would benefit society. People would consume less due to a price increase and producers would produce less. Banning these items completely would cause a black market of these items which would be bad for society.
ReplyDeleteMaking it illegal to smoke is a waste because people will still find a way to get cigarettes. Imposing high taxes may have a lasting effect, and might even eliminate the demand of them.
ReplyDeleteThe government should raise the taxes on cigarettes and alcohol so that people hopefully try and quit smoking and drinking
ReplyDeleteKeith jones
By making cigarettes and alcohol illegal, nothing would be accomplished. People would still have a desire for it and be able to attain it. If a tax is placed on cigarettes, people will have a harder time paying for it and it will reduce the amount smokers and spill over costs.
ReplyDeleteSince both are negative externalities they can impose a tax inorder to raise the price for consumers which lowers the demand, it also increases the cost of production which lowers the supply. All of which would be good for society, minus the potential for crime to increase because people might not want to pay extra so they might steal it.
ReplyDeleteGovernment can impose an even greater tax on cigarettes, and nationally prohibit public smoking. Both of thesenwould benefit society, and depending on the quantity demanded of cigarettes, cigarette tax revenue may increase
ReplyDeleteSince both of them provide huge income to the government the they should stay at the same price, if the price of a pack of cigarettes went up to 150 no one would buy them, the government wouldn't earn tax revenue, and tabaccoo farmers would go out of business thus costing more to the government as it would have to pay welfare to those individuals
ReplyDeleteThey should increase the tax of both alcohol and cigarettes. Even though people will still buy them, it will decrease the quantity they buy because it decreases income. People sill still demand it, however, even if they increase the tax
ReplyDeleteAn increase in tax on cigarettes and alcohol will disourage consumers from purchasing these items, or taxing suppliers to make the goods to decrease supply
ReplyDeleteRaising the taxes on cigarettes and alcohol would decrease the social cost because the cost would be higher to the consumers who demand the product and would for many decrease demand.
ReplyDeleteA greater tax on cigarettes would correct the negative externality by reducing then supply. The current tax actually reduces demand rather than supply, and most tobacco companies are big enough to see taxes as minuscule.
ReplyDeleteTaxing ciggeretes while a great way to increase revenue only works if a) all areas surrounding also increase the tax and b) your purpose isnt to decrease the use. Ciggerettes are hgihly inelastic as they are addicting any tax would have to be drastic to have an effect. Taxing alcohol would be more effective as its slightly more elastic but once again every area surrounding would have to have a similiar taxation.
ReplyDeleteAn extremely large tax on both of these substances would lower profit for producers and increase price for consumers. Additionally, eliminating the negative externalities would make this better for society.
ReplyDeleteCigarettes may negatively affect society but it's really not the governments job to regulate personal choices like smoking, a tax would be unfair so most of the prohibiting of smoking would have to be done with education on it's effects.
ReplyDeleteIf they were to tax alcohol and cigarettes morebthere would be a high social cost but good for society because less people would do them and also have a higher life expectancy.
ReplyDeleteI think that they could always raise the price of cigarettes or impose a tax but just like any other substance there will always be a market for it, but it might end up having less frequent users if it becomes illegal who aren't willing to try to acquire it illegally.
ReplyDeleteThey should raise taxes on alcohol and cigarettes so they can reduce the usage of those commodities. Making them illegal would only cause negative externalities and won't make the problem go away. But in the end, no matter the tax or the status of legality, there will still be demand for those commodities.
ReplyDeleteSince they create negative externalities, the best strategy would be to increase the government tax on alcohol and cigarettes, because making them illegal would simply force a black market to form and the government would have to pay more crime-related fees. An increased tax would effectively eliminate the spillover costs to consumers.
ReplyDeleteI think the best way to get people to stop smoking would be to largely increase government tax on drugs and alcohol. By enforcing higher prices, it will eventually cause people to stop spending the money on drugs and alcohol and spend it on hints they need to survive.
ReplyDeleteIn order to reduce the use of these commodities, there could be put a tax on them. Also, if there were more smoking sections that non smokers wouldn't enter, it would reduce second hand smoke.
ReplyDeleteI'd say tax it to a reasonable amount, that will generate good profit, but smokings banned in most public places so taxing it to the extreme will just make cigarette smokers lives more miserable.
ReplyDeleteI think that if the government would increase taxes on alcohol and cigarettes then less people would purchase them, which would lead to a decrease in their social costs. There should also be a decrease in the spaces and areas where smoking is allowed or tolerated.
ReplyDeletePlace a higher tax on cigarettes and hopefully that would lower the demand and less people would by them.
ReplyDeleteImpose a high tax on the selling of ciigarettes. This will reduce the demand, but not the supply. Tobacco companies may stop producing them, since there's a high profit for the government, but not the actual producers.
ReplyDeletePlacing an extreme tax increase on cigarettes will decrease the demand and will hopefully encourage consumers to quit. Also, having designated smoking areas will help the conflicting problem of second hand smoke.
ReplyDeleteIf the government increased the taxes on cigarettes or placed a price floor on cigarettes, consumers would buy less cigarettes.
ReplyDeleteI think that if the government got taxes on negative extremities to increase it would cause the buyers to think about quitting and that would cause the companies to lose money and the social costs would be decreased.
ReplyDeleteIncreasing the price of a pack will not eliminate smoking. Smokers will always pay the price for their cigarettes. Maybe the number of packs bought will decrease but it wont stop. I think if you get smoking to be eliminated at all, the production of cigarettes would have to stop.
ReplyDeleteRaise the price and/or tax of cigarettes so that less people buy them and that will lessen the social impact of cigarettes such as second hand smoke. But cigarettes will still imput money towards the economy when people do buy them.
ReplyDeletePosting a tax on alcohol and cigarettes will discourage consumers from buying the products, lowering quantity demanded. Since less consumers will be able to afford the product, hopefully more smokers and drinkers will slowly kill their habits and better their lives from indirect control of the government.
ReplyDeleteNo matter what you do, whether it's making smoking illegal or banning it in some areas, you will never be able to oust such a common activity forever. Maybe to cut down on it the government can make smoking in public areas, such as parks or restaurants, illegal and open up a specific area for smokers.
ReplyDeleteTaxing extras such as alcohol and cigarettes would theoretically be an easy solution to the problem, but in reality people will still buy and use the products in pretty much the same amount unless a cheaper substitute is found. Yes less people would start at a younger age, but it won't have a huge impact on older people who have an easier access to $$$
ReplyDeleteIf a significant tax was placed on cigarettes or alcohol, it would force people to quit the unhealthy habits. This would also benefit the innocent individuals who are exposed to second hand smoke because the rate of smokers would go down, thus decreasing the amount of people affected by second hand smoke.
ReplyDeletewell reading that a pack has a secret cost of $150 is very surprising but if you can afford it go for it. as all markets are free , there is a complementary aspect to cigarettes. which could be hospital, gum, ext.
ReplyDeletemy solution is to make smoking illegal. if you need nicotine get it in another form.
I think that by placing a tax on cigarettes will reduce the demand of them, although the supply would stay the same. This would decrease the amount of people buying cigarettes. There should also be a designated spot that allows smoking to reduce second hand smoke.
ReplyDeleteDrugs, cigarettes, and alcohol will still be sold even if they become illegal. If the taxes on cigarettes are increased I believe that some people will quit and the social cost will decrease, but people will still continue to buy them. I think that the government should fund research to create other alternatives for drugs and cigarettes that are safer for the user and those that are affected by second hand smoke. By creating substitutes for these products, the demand will decrease for unhealthy substances such as cigarettes.
ReplyDeleteThe government should leave the price because it brings in a huge majority of income in the united states. If the price were lowered it would have a huge impact on our countries economy
ReplyDeletePeople will still find a way to get cigarettes at a low cost but our government needs the money from taxes on the products.
ReplyDeleteraising taxes on alcohol and cigarettes might help decrease the demand for them because the social users will have more incentive to quit. social users consume the products in crowded places, and if they quit, the number of cases of negative secondhand health effects will go down. the tax would also generate more money because there are users who will always buy cigarettes or alcohol.
ReplyDeleteTo most likely reduce the social cost from cigarettes, there would probably have to be higher taxes on cigarettes. Consumers would most likely cut down on the amount of cigarettes they buy, or stop buying them as a whole, therefore lowering the cost to society for tobacco users. But at the same time, drastically changing a major market in the US economy, it will hurt the economy in the future, therefore not benefitting society until things equal out again.
ReplyDeleteI think to limit the social costs there should be more regulations and laws about using the legal drugs, such as smoking around anyone who is under 18 or no smoking in busy public places. Fines for these would have to be high so that people are detered from doing it.
ReplyDeleteThe social price of the cigarettes wasn't that surprising, but in order to fix the problem and lower the social price, i believe you have to take drastic measures. There should be a large tax on cigarettes, causing the price to rise and hopefully this will cause less people to buy them.
ReplyDeleteI agree with nick it does bring in a ton of income to the gov't but no matter how much they make the price per pack the demand will always be high for cigarettes because some people cant live without them.
ReplyDeleteBy placing a higher tax on cigarettes, consumers wouldn't buy as many of them. Also, another option would be to make cigarettes illegal. But, there really is no way for sure way to end smoking.
ReplyDeleteA tax should be placed on cigarettes in order to reduce supply. There will always be a demand for cigarettes, but people will buy less if there is a large tax, which would reduce the social cost.
ReplyDeleteIf we taxed alcohol/cigarettes that high I guarantee their would be a local speakeasy in Buffalo Grove. We shouldn't tax items that high because either way people are still going to drink and smoke. We should let people make decisions for themselves(responsible ones or not). If taxes were that high people would feel disrespected.
ReplyDelete