4 Estimating the costs of tobacco use

Reliable estimates of the costs of tobacco use are valuable to policy-makers, particularly in planning health service provision and other items of public expenditure. However, such estimates are difficult to obtain because the methods used by different researchers vary and, in some respects, are controversial. Four types of cost analyses are compared here and the implications of different methods for results are explored. The literature on the healthcare costs of smoking is more extensive than for other types of cost and therefore forms the focus of this chapter. Estimates of the gross healthcare costs of smoking (that is, all the expenditures associated with treating diseases attributable to smoking) for high-income countries range between 0.10% and 1.1% of gross domestic product (GDP).The higher estimates occur in countries where healthcare costs account for a relatively large share of GDP. In low-income and middle-income countries, fewer studies have been performed, and often with very limited data, but the existing studies suggest that the gross costs of smoking can be as high as those in high-income countries. Studies of the net healthcare costs of smoking—which compare the lifetime healthcare costs of smokers and non-smokers and take account of the fact that smokers’ lives are usually shorter than non-smokers’—reach more heterogeneous conclusions. This is because of major variations in the methods and assumptions used. However, the majority of these studies indicate that there are net costs from smoking. There is a clear need for refinement of the methods for making cost estimates, particularly for application in developing countries where the tobacco epidemic has yet to peak.