This is the first of what might be some posts with thin and/or recycled content.
Yesterday I finished the third of a series of posts examining a study that supposedly estimated the full costs (including health, etc.) of a pack of cigarettes. I used this to explain the concept of putting dollar values on the “invaluable”, as well as the limits of doing so, and some other principles of cost-benefit analysis. I concluded with the observation that it is almost impossible to justify doing an analysis that counts up how a behavior takes away life’s benefits (by costing life years) without including how it create benefits too (by improving their mental health, functioning, and happiness).
The “almost” in the last sentence refers to the one justification I can think of, if you are using the rest of that calculation to figure out the minimum benefit someone must be getting from the behavior. That is, if the calculation shows that the total cost someone pays per pack of cigarettes, netting out everything other than the day-to-day benefits of use, then those benefits must be greater than the caluculated cost. So since the study put that cost at $40/pack, the benefit to a smoker must be at least that. In the comments yesterday, Chris Snowdon picked up on this theme, and I wanted to expand upon what he wrote.
smokers tell us how much they value smoking by how much they spend on the habit
in the form of what they pay for a pack of cigarettes (purchase price, including taxes). He points out that the benefit must be this and then some. In economist speak, we have a revealed preference, the gold standard in consumer economic valuation, because consumers show us that the value must be at least what they are paying or they would not do it. I will offer a friendly amendment/clarification to what Snowdon wrote: The purchase price is that absolute minimum floor value for this, because smokers will also consider the anticipated health costs, as well as any costs from social scorn, etc. Even if someone makes the utterly absurd claim that smokers are oblivious to the health effects, the absolute minimum benefits must still exceed the purchase price.
It is certainly possible to make some arguments about the nuances, but the point is that such arguments have to be made. If someone is going to claim that, unlike every other consumer good, where revealed preference is considered gold and we trust people to show a tendency toward rationality and have common knowledge, smoking is different, they face a rather steep burden of proof. But in the dominant discourse about tobacco use, such arguments not even asserted, let alone established. And no, simply saying “cigarettes are different” is not the statement of an argument – a wee bit more detail is needed.
For example, it is possible to argue that smokers discount the future so heavily that they effectively ignore the health costs. It seems likely that they irrationally undervalue the future to some extent, since most people discount the future too heavily about everything, but quantification is needed. Those who want to make this argument are obliged to recognize that smokers do consider some of the health costs, and some quantification is needed. With that, someone could claim that the revealed preference floor is merely the purchase price plus that fraction of the health costs, and not the true total cost. Of course they do not do this because, as Snowdon put it,
anti-smokers heads would explode if they tried to come to terms with smoking being pleasurable or having benefits to the user….
But this refusal to acknowledge simple bits of reality means that the only two numbers on the table for the floor revealed preference (minimum benefits): the full cost of smoking and zero. And zero is obviously wrong.
There are other arguments to be made. It is possible to argue that smokers feel that the benefits do not outweigh the costs in the long run, but the short term difficulty of quitting is beyond what they are capable of enduring. This seems to be what most people have in mind when they talk about addiction (except the ones who just use the word to mean “use”, and the tiny odd minority who use the word to mean some biochemical process). This is theoretically possible, but it describes a very extreme situation. The obvious evidence – the fact that so many people quit when they really want to, the fact that many people get over the short term hump and then start again – argues against this. So if someone wants to craft this argument, they need a lot more than vague assertion to back it up. The closest anyone seems to come to actually trying to argue the point is claiming that most smokers say they want to quit, or try to quit, but it is pretty clear that this is about second order preferences or is just cheap talk, and is obviously not enough to establish what should be seen as a rather extreme claim about deviation from rationality.
Bottom line: Rhetoric can convince causal readers and impressionable children that smoking is somehow such an extremely odd experience that it defies the rules that describe 99.99% of consumption choices, that it challenges rational analysis as much as North Korean indoctrination or facing the decision to cut your own arm off to escape the wilderness, or at least as much as methamphetamine. But scientists and other honest serious people should know that this requires some extreme evidence. That does not merely mean showing that there is some deviation from perfect rationality, because that is true for most every decision – the argument being made is not that there is a deviation from perfect rationality, but that even the most basic rules of rational behavior do not apply. So,
(a) Extraordinary claims require extraordinary evidence. Hypothesizing extraordinary claims without having the extraordinary evidence is acceptable as long as someone admits they are doing this. But never trust anyone who want you to believe that an extraordinary claim is self-evident.
(b) Absent compelling evidence to support the extraordinary claims, we have to recognize that a group of health economists have argued that a pack of cigarettes provides over $40 worth of benefit, or at least more than a large fraction of this if we allow for deviations from perfect rationality.