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1 I I I I I I I I I I I I I I ~~ ',,~ PREVENTiVE MEDICINE 13, 377-389 (1~,~) The Economic Costs of Smoking and Benefits of Quitting for Individual Smokers' GERRY OSTER,''Z GRAHAM A. Cot.Dt7Z,t AND NANCY L. ICELLY' 'Policy Analysis Inc.. 1577 Beacon Strret, Brookline, Massach.uetts 02146, and tDepartneent of Medicine, Harvard Medical School, 25 Shattuck Street. Boston. Massachusetts 02115 The results of a study that estimated the expected lifetime economic consequences of ciprette smoking for individual smokers are reported herein. The estimates were obtained by combining age- and sex-specific estimates of the incidence-based costs of three smokin=- related diseases (lung cancer, coronary heart disease, and emphysema) with estimates of smokers' increased likelihood of developing these illnesses in each remaining year of life relative to nonsmokers. Estimates of the economic consequences of quitting based on these disease cost estimates and on estimates of exsmokers' probability of future disease relative to continuing smokers are also reported. Both the estimates of the economic costs of smoking and the benefits of quitting were calculated separately for men and women between the a$es of 35 and 79 who were light, moderate, or heavy cigarette smokers. While the economic costs of smoking varied considerably by sex, ass, and amount smoked, they wets significant for all pvups of smokers. Costs for a 40-year-old man, for exampk, ranw from 520,000 for a smoker of less than one pack of cigarettes per day to over $56,000 for a smoker of more than two packs of c4arsttes per day. The economic benefits of quitting also were found to be sizabie for all groups of smoiters. o lu. Adesc ns... l.c. INTRODUCTION Although the health consequences of cigarette smoking have been well docu- mented (19-22), relatively little is known about the economic consequences of these adverse effects on smokers' health. Existing studies of the economic impact of smoking have employed prevalence-based approaches, typically estimating the cost of current smoking-related morbidity and premature mortality (1, 13, 14). No study, however, has utilized an incidence-based approach, which focuses on the present value of future costs of morbidity and mortality. Consequently, little is known about the magnitude of future economic costs for smokers who are currently disease-free or about the potential economic benefits of quitting. In this article, we report estimates of both the expected economic costs of smoking and the benefits of quitting for current smokers. Incidence-based cost-of-illness procedures were first used to estimate the present value of the lifetime costs of ilinesses that smokers might develop as a consequence of cigarette smoking. These costs included treatment expenses (di- rect costs) as well as the value of illness-related work loss due to premature death and disability (indirect costs) (11). Estimation of the expected costs of smoking NOTICE This mxtaf;<i 1~ay he protectEd Ly , ry, ~';St l.Mt (Tifia ia U.S. c3de). 2 To whom reprint requests should be addressed. ~ O 377 ~ 0091-7435/54 53.00 ~ Covyrutg C I4sM by Ae.derne Preas. tnc. ~ AU nghu of repodwtws m any fan reserv.d. ~ ~ ~ W ~ 1 Funds for this research were provided by a research Qrant from Merrell Dow Pharmaceuticals inc.

I 378 OSTER, COLDTTZ, AND KELLY then was based upon an evaluation of the increased probability (or marginal ris~ that smokers (as compared with nonsmokers) will develop these diseases in ea future year of life. The economic benefits of quitting were estimated in a similar fashion, the focus in this instance being on quitters' reduced likelihood of disea relative to continuing smokers. Therefore, in contrast to traditional cost-of-illne studies that focus on the costs of disease among the ill (11), our approach com- bined information on the costs of smoking-related illnesses with estimates of health risks of smoking in order to generate estimates of the likely (i.e., expecte future costs of smoking and of the benefits of quitting for individuals current disease-free. Due to limitations in data, we confined our study to three major disease co~ ditions: lung cancer, coronary heart disease [CHD; comprising three distinct di nostic categories: sudden death (SD), myocardial infarction (MI), and coronary insufficiency (CI)], and emphysema. The costs of smoking reported here refle the average economic losses that current smokers are likely to generate over~ lifetime because of their increased risks of developing these three diseases. Sim- ilarly, the reported benefits of quitting reflect expected reductions in economic losses as a result of lifelong reductions in the risks of developing lung cance~ CHD, and emphysema. All estimates are expressed in 1980 dollars and take int account all direct and indirect costs that smokers are likely to generate, whether they are the ones who will ultimately assume these costs or not. Our estimates of the costs of smoking and benefits of quitting are probabl~ conservative. While lung cancer, CHD, and emphysema are unquestionably the major disease conditions that have been linked to smoking, smoking has bee implicated in the etiology of other chronic and neoplastic disease conditions tha, are not considered in this study (20). Also, our estimates do not take into accoun economic costs other than those directly related to disease (e.g., the costs c( residential and commercial fires), noneconomic costs, or the costs of smokirc~, related diseases among nonsmokers (i.e., the costs of passive smoking). Finati; .~ our estimates of the costs of smoking and the benefits of quitting do not include the cost of cigarettes. ANALYTICAL FRAMEWORK I Our analytical framework likened smoking to a game of chance.3 In effect, every smoker was viewed as engaging in a lifelong series of gambles with his ori her health, each occurring in a successive future year of life. The unlucky "win i- ners" in any year's gamble develop one of a variety of smoking-related diseases and generate its attendant economic costs, comprising treatment expenses ar,d~ lost earnings. As with any game of chance, we may characterize each gamble by the average outcome experienced by its participants, or the expected value (EV). Simply put, the EV is equal to the probability of winning (or losing) multiplied by the amount that one can win (or lose). Thus, for example, the EV of a costlessf 3 A complete presentation of the methods employed in this study is contained in Chapter :. "Es- ` timatint; the Economic Costs of Smoking and Benefits of Quitting," in Oster et ul. i 17) .~'. d I ~ ~ I

I I I I I I I I I COSTS OF SMOKING, BENEFITS OF QUITTING 379 iottery in which there is a 1-in-1,000 (0.001) chance of winning $1,000 (and a 999- in-1,000 chance of winning nothing) is $1 (or, $1,000 x 0.001). In the case of smoking, of course, the outcome at risk is a potential loss rather than a gain. At any point in time, each future year's gamble may be represented by the additional likelihood that a smoker will develop a smoking-related disease during that year (given that he or she both lives and remains disease-free until that year). Corresponding to each of these future gambles, there is an associated economic cost (the sum of the direct and indirect costs of illness) that represents the amount that would be lost if an illness were to develop in that year of life. The smoking "gamble" can thus be characterized by a series of EVs, each representing an expected economic loss in a successive year of life. The costs of smoking for a current smoker are equal to the sum of these expected annual losses, each dis- counted to reflect its appropriate present value.• Calculation of the costs of smoking therefore depends upon estimation of the lifetime costs of smoking- related diseases at every possible age of onset as well as smokers' increased likelihood of developing these diseases at each age. Just as there are expected costs of smoking resulting from the higher probability of serious illness, so there are expected economic benefits associated with re- ductions in the risk of disease. By definition, these benefits are equal to the losses (i.e., costs of illness) that are likely to be avoided by individuals who quit smoking. Hence, the benefits of smoking cessation may be represented by a series of expected annual cost savings. As with the calculation of smoking costs, sum- mation of these expected annual cost savings, each appropriately discounted to reflect the year to which it corresponds, yields an estimate of the economic benefits of quitting. If quitting resulted in an immediate elimination of all future increased risk of disease, the estimation of associated economic benefits would be a trivial under- taking. If all expected future costs of smoking could be avoided, then the dollar value of benefits simply would be equal to the amount of these costs. The elim- ination of marginal disease risks is not instantaneous, however; while former smokers experience significant reductions in their risks of smoking-related ill- nesses soon after quitting, these risks nonetheless remain higher than those of nonsmokers for a number of years. Hence, the economic benefits of quitting are equal to the difference between current smokers' and former smokers' expected additional costs of illness (relative to nonsmokers). Quitters' expected cost sav- ings in any given future year will be less than smokers' anticipated losses in that year if the quitters experience risks of disease in excess of those experienced by nonsmokers. The benefits of quitting are thus a function of the rate at which smokers' likelihood of disease declines in the period after quitting, and the cal- culation of these benefits necessitates the estimation of these reductions in annual disease risk. ' Costs that do not accrue in the same year should not be directly summed. since they are expressed in diftrent units of value, i.e., different years' dollars. Discounting is a technique that expresses these costs in terms of their value in a common reference year. I I

I 380 OSTER, COLDITZ, AND KELLY SMOKERS' MARGINAL RISKS OF LUNG CANCER, CORONARY HEART DISEASE, AND EMPHYSEMA Due to limitations in available data, it was assumed that smokers' marginal r~ of disease depended only upon age, sex, and amount smoked, but not on the length of time they had smoked. Estimated marginal risks of lung cancer, C r (SD, MI, and CI), and emphysema for light, moderate, and heavy smokers ~ presented in Table 1, expressed in terms of the number of additional cases nually relative to nonsmokers per 100,000 population (or marginal rates of inci dence), for men and women in 5-year age increments ~. Lung Cancer Sex- and age-specific lung cancer incidence rates for nonsmokers we e mated using data reported by Garfinkel (8). Lung cancer incidence rates forc r rent smokers were obtained by first multiplying data on total sex- and age-spe~~~"'c U.S. lung cancer incidence by the estimated proportions of reported lung cance (82.8% for men and 43.1% for women) attributable to smoking (9, 15). Th totals were then divided by the number of current and former smokers in c age-sex group; the resultant rates were assumed to be average incidence rates for all current smokers. Separate sets of incidence rates for light, moderate, heavy smokers were then generated from these average rates using data on , ative risk that were contained in the 1982 Surgeon General's Report (22). Coronary Heart Disease Sudden death, myocardial infarction, and coronary insufficiency inciden . rates for nonsmokers and for light, moderate, and heavy smokers were taken directly from the Framingham Heart Study (FHS) (6, 7).5 For FHS participaz~ over the age of 65, incidence rates were actually slightly lower for smokers th nonsmokers, but this finding was not statistically significant. Therefore, it assumed that smoking had no effect on CHD risk past the age of 65, and .cr~ marginal incidence rates are indicated for these smokers in Table 1. Emphysema Emphysema is almost exclusively a smokers' disease; the lung obstructi characteristic of emphysema is almost never observed among nonsmokers (4, Therefore, a zero rate of incidence was assumed for nonsmokers. Emphysema incidence rates for smokers were calculated from estimated prevalence rates o tained by dividing U.S. sex- and age-specific prevalence by the number of curre~ and former smokers in each age-sex group (16). Incidence rates for smokers were then generated from these prevalence rates, assuming a mean survivai ti of 5 years past diagnosis (2, 12). The resultant estimates were assumed to ~ mean incidence rates for all current smokers. Separate sets of incidence rates f light, moderate, and heavy smokers were then generated using these average rates and data on relative risk reported by Ferris et al. (3). 1 s For women between the ages of 35 and 44. these rates are reported for Mt only. I

tvwut0z TABLE I AlWMT10NAL ANNUAL CASES OF LUNO CANCER (LC), SU^PJEN DEATH (SD), MYOCARDIAL INFARCTION (MI), CORONARY INSUFFICIENCY (CI), AND EMPHYSEMA (EM) FOR LtOHT, MODERATE, AND HEAVY SMOKERS (PER 100,000 PERSONS) Light smokers (less than I pack per day) Moderete smokers ( I to 2 packs per day) Heavy smokers (more than 2 packs per day) LC SD MI CI Em LC SD MI CI Em LC SD MI CI Em Men 35-39 13 9 27 9 122 25 28 59 28 180 33 67 97 67 324 40-44 48 9 27 9 252 85 28 59 28 370 (09 67 97 67 666 45-49 125 33 104 17 394 217 90 258 36 580 277 185 486 60 1.044 50-54 226 33 /04 17 537 389 90 258 36 790 4% 185 486 60 1.422 55-59 273 44 155 12 673 645 % 343 26 990 825 158 571 43 1,782 60-64 375 44 155 12 809 990 % 343 26 1,190 1,264 158 571 43 2,142 65-69 784 0 0 0 1,278 1,355 0 0 0 1,880 1,732 0 0 0 3.384 70-74 948 0 0 0 1,476 1,634 0 0 0 2,170 2,088 0 0 0 3,906 75-79 989 0 0 0 1,673 1,727 0 0 0 2,460 2,215 0 0 0 4.428 Women 35-39 7 - 4 - 63 IS - 30 - 100 24 - 194 - 230 40-44 21 - 4 - 95 44 - 30 - ISO 68 - 194 - 345 45-49 39 9 20 0 164 84 30 46 0 260 130 80 80 0 598 50-54 60 9 20 0 214 127 30 46 0 340 1% 80 80 0 782 55-59 88 0 27 33 252 189 0 59 75 400 294 0 126 129 920 60-64 111 0 27 33 296 236 0 59 75 470 366 0 126 129 1.081 65-69 116 0 0 0 914 255 0 0 0 1,450 399 0 0 0 3,335 70-74 109 0 0 0 1,084 240 0 0 0 1,720 377 0 0 0 3,956 75-79 81 0 0 0 1,216 205 0 0 0 1.930 334 0 0 0 4,439 w 00

I 382 OSTER, COLDTTZ, AND KELLY THE ECONOMIC COSTS OF SMOKING I I The EV of the loss a smoker may experience in any future year of life is roughly equal to his or her marginal risk of disease in that year (presented in Table s multiplied by the corresponding costs of illness that may be incurred. (The lif tun e costs of lung cancer, CHD, and emphysema were estimated by the authors for men and women between the ages of 35 and 79 (17), but are not reported h due to space limitations.) The costs of smoking are equal to the discounted s~ of this series of expected losses. Estimates of the costs of smoking associated with increased lifelong risks of lung cancer, CHD, and emphysema for men and women between the ages af ~ an d d 79 are reported in Table 2. These costs were estimated in 5-year age grau for light, moderate, and heavy smokers, and were tallied in 1980 dollars using a 3% annual real (i.e., net of inflation) rate of discount and assuming a 1.% futu real rate of growth in labor productivity (which was used in the valuation forgone earnings). In addition, we assumed that a smoker's current level of ci - arette consumption would remain constant throughout life; cost estimates there- fore reflect the level of losses likely to result if no change occurs in smokii~ habits. While none of the three disease conditions may uniformly be described as tttc single, most costly expected consequence of smoking, the costs of smoking d to increased risk of emphysema are greatest across nearly all of the categori~ investigated. For example, for men ages 40-44 who are moderate smokers, the costs of smoking associated with lung cancer, CHD, and emphysema are, re- spectively, about $7,100, $6,500, and S 19,600; the corresponding costs for wom are approximately $2,000, $500, and 56,500.6 The comparatively high costs 11 smoking associated with emphysema result from smokers' higher marginal risks of this disease in comparison with lung cancer and CHD (see Table 1), since ti lifetime costs of emphysema are actually slightly lower than those of the othe two disease conditions (17). Regardless of disease, the expected costs of smoking are consistently highe controlling for age and sex, as the quantity of cigarettes smoked increases. F~ men ages 40-44, for example, the expected costs for heavy smokers are mor than twice those for light smokers for lung cancer and emphysema ($9,055 vs $4,175, and $35,333 vs $13,348, respectively). For CHD, heavy smokers' cost are almost five times higher (S12,282 vs 52,664). Also, almost without exceptio the costs of smoking are highest for the youngest age group, controlling for sex and quantity smoked, and decline gradually with age. 1 6 Lower cost-of-smoking estimates for women are the products of two factors. First, existing epi- demiological data sources suggest that women experience generally lower marginal disease risks tha men at any given age and level of smoking (see Table t). This could be the result of a number o~ factors. ranging from sex differences in smoking behavior (for example. depth of inhalation or numbe of "drags" per cigarette) to differences between men and women in disease etiology. Secona. the costs of smoking for women are also lower because of women's lower earning levels, which result i lower potential earnings losses. These differences in costs of smoking typically vanish by the ag~ of 65.

W mm M' Mmm mmm Am M MM mmm .rw M TABLE 2 THE ECONOMIC COSTS OF SMOKING FOR LIGHT, MODERATE, AND HEAVY SMOKERS DUE TO INCREASED RISKS OF LUNG CANCER (LC), CORONARY HEART DiseesE (CHD), AND EMfl1YSEMA (EM)' Light smokers (less than I pack per day) Moderate smokers (I to 2 packs per day) Heavy smokers (more than 2 packs per day) LC CHD Em Total LC CHD Em 1btal LC CHD Em Total n 0 ~ Men ~ m 35-39 $3 940 $2,874 $14,753 $21,567 $6,714 $7,154 $21,695 $35,563 $8,546 $13,707 $39 051 $61,304 0 40-44 , 4,175 ; 2,664 13,348 20,187 7,114 6,543 19,629 33,286 9,055 12.282 , 35,333 56,670 n N 45-49 4,042 2.186 10,530 16,758 6,887 5,274 15,486 27,647 8,767 9,692 27,875 46.334 ~ 50-54 3 500 1 352 7 188 040 12 965 5 3 119 10 571 655 19 7 592 473 5 028 19 32 093 0 , , , , , , , , , , , . ~ 55-59 2,732 705 4,313 7,550 4,656 1.546 6,343 12,545 5,926 2,551 11,417 19.894 z 60-64 2.025 193 2,607 4,825 3,450 425 3,834 7,709 4,391 703 6,901 11.995 0 65-69 1,551 0 1,850 3,401 2,642 0 2,720 5,362 3,363 0 4,896 8,259 m 70-74 1,158 0 1,318 2,476 1.974 0 1,939 3.913 2,513 0 3,490 6,003 r» z 75-79 912 0 946 1,758 1,384 0 1,392 2,776 1,761 0 2,505 4,266 M Women ~ ~ 35-39 939 2146 4,261 5,414 1.918 662+ 6,763 9,343 2,937 2,400 15,555 20,901 40-44 985 2146 4,075 5.274 2,011 547; 6,468 9,026 3,078 1,4471 14,877 19,402 0 ~ 45-49 968 342 3,680 4,993 1,976 859 5,841 8,676 3.026 1,809 13,434 18,269 A 50-54 tt91 245 3,106 4.242 1,819 576 4,930 7,325 2,784 1,168 11,340 15,292 55-59 788 164 2,606 3,559 1,608 365 4,136 6,109 2,462 695 9,513 12,670 60-64 685 53 2,298 3.038 1,399 122 3,647 5,166 2,142 233 8,389 10,764 ~ z 65-69 541 0 1,921 2,462 1,106 0 3,050 4,156 1,692 0 7,014 8,706 n 70-74 340 0 1,296 1,636 694 0 2,057 2.751 1,063 0 4,731 5,794 75-79 210 0 836 1,046 429 0 1,328 1,757 657 0 3,054 3,711 • AM costs Rre in 1901) doilRrs, discounted.t a 3%.nnuai rate, assuming a 1% annual rRte of growth in labor productivity. ~ CHD cost estimates for women between the ages of 35 and 44 are for myocardial infarction only. w 00 w U86444tp~

I 384 OSTER, COLDITl, AND KELLY While summation of costs across diseases will not produce precise estima s of the total costs of smoking, it can provide some indication of their likely ma¢- nitude.7 As Table 2 indicates, these total costs are sizable, particularly for he smokers under the age of 50. For example, male heavy smokers between the of 40 and 44 will generate, on average, over $56,000 in additional costs of illness during their lifetimes, while for women, these costs will be over $19,000. Althot~ costs decline with both age and quantity of cigarettes smoked, they are significIIIirrr for all smokers. OUITTING AND REDUCTIONS IN MARGINAL RISKS OF LUNG CANCERI CORONARY HEART DISEASE, AND EMPHYSEMA The economic benefits of smoking cessation are a byproduct of reductions in future likelihood of disease. Calculation of these benefits requires that these d' ease risk reductions be estimated. We assumed that they depended both upj the amount that one had previously smoked and the length of time since quitting. Lung Cancer The impact of smoking cessation on future lung cancer risk was estimated the basis of findings reported by Hammond for annual excess lung cancer mor- tality among male exsmokers ages 50-69 (10). Former light smokers were fous~ to return to nonsmokers' risk levels approximately 5 years after quitting. Fornr I~ heavy smokers, however, did not return to nonsmokers' levels of lung canzer mortality until more than 10 years after they stopped smoking. We assumed th these results would apply to smokers of all age-sex groups, and that the effo~ of quitting on lung cancer incidence would be identical to its effect on lung canc mortality. On the basis of Hammond's findings, logit functions were used to estimate t proportion of marginal lung cancer risk that was likely to be experienced V former light, moderate, and heavy smokers in each year after they stopped smoking. The marginal risk of lung cancer in each year after quitting for exsmoker of any given age, sex, and prior amount smoked was then calculat by multiplying a corresponding smoker's estimated marginal risk (Table i) by th proportion of this risk that a quitter was likely to experience. Coronary Heart Disease I The impact of smoking cessation on future CHD (SD. MI. and CI) risk also was estimated on the basis of findings reported by Hammond for male exsmokeI I On the one hand, since other chronic and neoplastic diseases have been linked to cigarett smoking, the sum of smoking-related costs associated with lung cancer. CHD. and emphysema ten to understate sigstificantly the actual total costs of smoking. Counterbalancing this. however, is t fact that adding the costs related to these three diseases together would tend to overstate actual total expected costs if a smoker can develop more than one of these diseases. While actual treatment expenses may or may not be less than the sum of treatment costs for each disease when two diseas~ are present. earnings losses definitely will be less than the sum of estimated indirect costs for eac since an individual cannot forgo the same earnings stream twice. I ZZ) © ~ ~ ~ ~ F~  07 -i

I I I I I I I I I I I I i COSTS OF SMOKING, BENEFITS OF QUITTING 385 between the ages of 50 and 69 (10). Former light smokers experienced a marked decline in excess CHD mortality within one year of quitting, and the decline to nonsmokers' risk levels was complete by the tenth year after cessation. Former heavy smokers, though, did not return to nonsmokers' levels of CHD mortality until about 15 years after they stopped smoking. As with lung cancer, we assumed that Hammond's reported findings would apply to smokers in all age-sex groups, and that the effect of quitting on SD, MI, and CI incidence would be identical to its effect on CHD mortality. In a manner similar to that used for lung cancer, the proportion of CHD risk that exsmokers were likely to experience in each year after quitting was esti- mated. These were then multiplied by the marginal risks of continuing smokers (Table 1) to yield estimated marginal SD, MI, and CI risks for former light, mod- erate, and heavy smokers. Emphysema In nonsmokers, respiratory function typically declines at the rate of about 30 ml per year after age 30 (5). For smokers, the rate of decline can be two to three times as great, or about 60-100 ml per year. Once smokers quit, though, their rate of decline in respiratory function almost always reverts to that of nonsmok- ers (5). Despite the fact that the rapid declines in pulmonary function characteristic of emphysema stop once a smoker quits, prior loss of lung function is permanent. Because of this, former smokers may still develop emphysema several years after quitting. Normal (i.e., nonsmokers') additional losses of pulmonary function, together with earlier smoking-related losses, may still be sufficient to result in a diagnosis of emphysema later in life. To estimate the effect of quitting on future emphysema risk, we first assutt.ed that individuals quit voluntarily-not because of experiencing symptoms of chronic obstructive lung disease. Second, we assumed that disease incidence among exsmokers in the year immediately following cessation would be equal to that experienced by continuing smokers. Finally, in the second and all subsequent years after quitting, we assumed that disease risks would be reduced by an amount proportionately equal to the relative improvement in the rate of pulmo- nary function decline. Thus, for example, assuming an initial 80 mUyear decline in respiratory function, we estimated that a moderate smoker who quit would experience a marginal risk of emphysema in the second and all later years of life following cessation equal to 38% of the marginal risk experienced by a continuing smoker (30 ml/year divided by 80 mUyear). An exsmoker's marginal risk of emphysema in any given year following ces- sation was then estimated by multiplying a smoker's marginal risk (Table 1) by the proportion of this risk that quitters were likely to experience in that year. THE ECONOMIC BENEFITS OF QUITTING Estimates of the benefits of quitting associated with lifelong reductions in the risks of lung cancer, CHD, and emphysema are reported in Table 3 for men and I

TABLE 3 THE EcONOMIC BENEFITS OF QUITTING FOR LIGHT, MODERATE, AND HEAVY SMOKERS DUE TO REDUCTIONS IN THE RISK OF LUNO CANCER (LC), CORONARY HEART DaS@ASB (CHD), AND EMPHYSEMA (EMr Light smakers (less than I pack per day) Moderate smokers (I to 2 packs per day) Heavy smokers (more than 2 packs per day) LC CHD Em Total LC CHD Em Total LC CHD Em 7btal Men 35-39 $3.421 $2,331 $6,882 $12,634 $5,046 $5,195 $12.654 $22,895 $6,423 $8.545 $25,861 $40,829 O 40-44 3,119 1,909 6,032 11,060 4,304 3.930 11,095 19,329 5,479 5,815 22,679 33,973 45-49 546 2 240 1 4 588 8 374 325 3 2 364 445 8 14 134 232 4 3 189 17 269 690 24 ~ , , , , , , , , , , , , 50-54 1,892 657 3,010 5,559 2,391 1,127 5.546 9,064 3,0/4 1,350 11,351 15,745 55-59 1.343 226 1,741 3,310 657 1 360 3,217 5,234 2,110 387 6,596 9,093 t7 60-64 941 29 1,060 2 030 , 108 1 47 1,965 120 3 411 1 56 4 0/0 Or 507 5 65-69 629 0 739 , 1,368 , 699 0 1.372 , 2,071 , 890 0 , 2,823 , d 3,713 70-74 388 0 522 910 407 0 968 1,375 519 0 1,990 2,509 ~ 75-79 218 0 364 582 221 0 673 894 281 0 1,381 1.662 Women ~ 35-39 818 1866 1,999 3,003 1,489 443b 3,967 5,899 2,280 9551, 10,359 13,594 40-44 776 1646 1,889 2,829 1,362 332" 3,751 5,445 2,085 5V 9,800 12,464 45-49 695 222 1,663 2,580 1,185 446 3,307 4,938 1,815 729 8,645 11,189 50-54 598 144 1,383 2.125 982 254 2,753 3,989 1,503 358 7,205 9,066 55-59 490 60 1,155 1,705 741 99 2,302 3,142 1,134 123 6,034 7,291 60-64 347 9 1,023 1.379 488 14 2,043 2,545 748 20 5,357 6,125 65-69 212 0 791 1.003 292 0 1,580 1,872 447 0 4,145 4,592 70-74 124 0 524 648 168 0 1;046 1,214 258 0 2,743 3,001 75-79 74 0 330 404 96 0 658 754 147 0 1,724 1,871 " AII benefits are in 1980 dollars, discounted at a 3% annual rale. assuming a 1% annual rate of growth in labor productivity. s CHD benefit estimates for women between the ages of 35 and 44 are for myocardial infarction only. MMMMM mm mmm MM mm mm =•r om

6 I I I I I I I I I I I I I I COSTS OF SMOKING, BENEFITS OF QUITTTNG 387 women between the ages of 35 and 79. Our benefit estimates for light, moderate, and heavy smokers are reported in 5-year age groups, and were tallied in 1980 dollars using the same real rates of discount and productivity growth that were used to calculate the costs of smoking. Benefits were measured against the costs that were likely to be generated by individuals who continued to smoke an iden- tical amount throughout their lifetimes. In addition, we assumed that once a smoker quit, it would be for life. Our estimates of the benefits of quitting are not surprising in light of our findings regarding the costs of smoking. The greatest benefits were found to be associated with reduced risks of developing emphysema, although they are sizable irrespec- tive of disease condition. For example, for men ages 40-44 who are moderate smokers, the benefits of quitting associated with reduced risks of lung cancer, CHD, and emphysema are, respectively, about 54,300, $3,900, and $11, 100; the corresponding figures for women are approximately $1,500, $300, and $3,800. As expected, these benefits are consistently higher for those who were formerly heavy smokers, and are greatest for persons in the youngest age groups. Summation of benefits across the three diseases suggests that the total benefits of quitting are sizable.8 For male heavy smokers under the age of 45, the present value of total lifetime dollar benefits is about $34,000, and for women, the cor- responding total is over 512,000. Even for the very oldest age groups (i.e., age 70 and over), the total benefits of quitting are by no means inconsequential. For men, they range from about $600 to slightly over 52,500; for women, the range is from S400 to about 53,000. DISCUSSION This study has found that the expected costs of cigarette smoking for individual smokers are substantial. While these costs vary with sex, age, and the amount smoked, there was no group of smokers that was not expected to generate sizable losses. Furthermore, the results of this study have shown that, at any age, it literally pays to stop smoking, since the benefits of quitting are also sizable. The relative effectiveness of smoking cessation may be conveniently assessed by computing ratios of the overall benefits of quitting to the total costs of smoking.9 What each reveals is the expected proportion of smoking-related losses that a given smoker can avoid by quitting. In a sense, these ratios indicate the extent of "cost recovery" possible; the higher this ratio, the greater the relative benefits of quitting. s Considerations similar to those noted in footnote 7 apply to the addition of benefits-of-quitting estimates across diseases. s While these cost recovery ratios are equal to the ratio of the benefits of quitting to the costs of smoking, it is not a beneflit-cost ratio in the traditional sense. A benefit-cost ratio compares the benefits and costs of one specific course of action, while the ratio of the benefits of quitting to the costs of smoking compares the results of two alternative courses of action (i.e., quitting vs continuing to smoke). Related to this difference is the fact that our cost recovery ratios will always be less than I since an exsmoker's risk of developing a smoking-related disease does not return to that of a nonsmoker for a number of years after smoking cessation. Consequently, the bene®ts of quitting for an exsmoker can never be as great, in absolute terms, as the costs of continuing to smoke.

388 OSTER, COLDTIZ, AND KELLY I I I TABLE 4 TorAr. CosT RECOVErsY RATtos FoR LiGHr, MoDEJL+TE, AND HEAvY SatoKERs Light smokers Moderate smokers Heavy smokers I Mea 35-39 0.586 0.644 0.666 40-44 0.548 0.581 0.600 45 -49 50-54 0.500 0.511 0.462 0.461 0.511 0.491 I 55-59 0.438 0.417 0.457 60-64 0.421 0.405 0.459 65-69 0.402 0.386 0.450 I 70-74 0.368 0.351 0.418 75-79 0.331 0.329 0.322 Women 35-39 0.555 0.631 0.650 a 40-44 0.536 0.603 0.642 45-49 0.517 0.569 0.613 50-54 0.501 0.545 0.593 55-59 0.479 0.514 0.576 I 60-64 0.454 0.493 0.569 65-69 0.407 0.450 0.528 70-74 0.396 0.441 0.518 75-79 0.386 0.429 0.504 -1 Estimated cost recovery ratios for men and women are presented in Table 4. Although these ratios are highest for younger smokers, it is apparent that it is literally never too late to stop smoking. While quitters below the age of 45 are likely to avoid between 54 and 67% of expected lifetime losses due to smoking, even those over the age of 70 are likely to avoid between 32 and 52% of these~ expected losses. Our findings have many potential uses. For individual smokers, they may pro- vide yet another powerful argument against smoking. Similarly, physicians may~ find them useful in encouraging their patients to quit smoking. Corporate decision makers also may find our estimates useful in their attempts to evaluate the cost effectiveness of employer-sponsored smoking cessation programs. Finally, our study undoubtedly will prove useful to policymakers in government as they in-I creasingly turn their attention to the economic burden of the health consequences of cigarette smoking and the question of who should ultimately pay these stag-~ gering costs R. REFERENCES 1. Cady. B. Cost of smoking. New Engi. J. Afed. 308. 1105 (19E3). 2. Diener. C. F.. and Burrows. B. Further observations on the course and prognosis of chroni obstructive lung disease. Amer. Rev. Resp. Dis. 11, 719-724 (1975). 3. Ferris. B. G.. Chen. S. P.. and Mutphy, L. H. Chronic nonspecific respiratory disease in Berlin. New Hampshire: A further follow-up study. Amer. Rev. Resp. Dis. 113. 475-485 (1976). 4. Fletcher. D.. and Peto. R. The natural history of chronic airflow obstruction. Brir. Med. J. 1. 1645-1648 (1977).

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