David M. Cutler and Edward L. Glaeser

Why Do Europeans Smoke More than Americans?

March 2006

12124

Paper Website

Ian Gorovoy

2006-4-12

2006-4-24

The Paradox. The general unhealthiness and inverse relationship between income and smoking means Americans should be heavy smokers.

In Why do Europeans smoke more than Americans, Cutler and Glaeser try to assess why the smoking rate is low in the United States compared to other developed countries, especially those in Europe. The U.S. is clearly not one of the healthiest developed countries. Americans rank first in obesity and their consumption of alcohol is the mean. Furthermore, the authors find that Europe has higher prices for cigarettes and stricter anti-smoking regulations. Given this information, why is the U.S. so smoke free? The authors conclude that one-fifth of this difference in smoking rates between the U.S. and Europe is caused by the inverse relationship between smoking and income and one-half of the difference is the result of differences in beliefs about the damage of smoking.

Inertia and tradition are often reasons why trends continue. However, this reasoning is not the case for smoking in the United States. The U.S.’s abstinence from smoking is a very recent phenomenon. Cigarette smoking in the U.S. jumped from 267 cigarettes per adult in 1914 to over 4,300 cigarettes per adult in 1963 before plummeting to around 2000 today. Through the 1960s, the U.S. had much higher per capita tobacco consumption than any Western European country. Today adult Americans smoke 10% less than average developed nation. 19.1 percent of adult Americans smoke, as opposed to 34 percent of Germans or Japanese and 27 percent of the French or English.

When coupled with the unhealthiness of Americans, this fact that smoking levels dropped so dramatically is noteworthy. The authors study three factors to determine how they affect the lower U.S. smoking rate:

  1. whether the effective price of cigarettes, which reflects both taxes and other regulations on tobacco, is higher in the U.S, which would discourage smoking.
  2. whether higher American income levels might explain the lower level of U.S. cigarette consumption. (The correlation between smoking rates and income appears inverse except for at the very poorest level).
  3. whether differences in beliefs about the consequences of smoking causes Americans to smoke less.
The authors use data from the World Health Organization Tobacco Control Database, the Eurobarometer survey in 1994, and the U.S. National Survey of Drug to determine the effects of these three variables.

The authors find that reason one is not true. Lower levels of smoking in the U.S. do not occur because of higher cigarette prices. The average cigarettes price in the U.S. is in fact 37% cheaper in the U.S. than in the European Union. For example, the average price per pack in the United Kingdom is $6.25 compared to an average price per pack in the U.S. of $3.60. The mean tax on cigarettes is $0.86 in the U.S. and $2.06 in France. Previous research shows that cigarette consumption has an elasticity of -.5. Plugging in the 37% price difference, Cutler and Glaezer find that when holding everything else constant, cigarette consumption with respect to price should be nearly 20% greater in the U.S. than in Europe.

Besides the financial cost of smoking, bans and regulations raise the cost of smoking. Theoretically, it is possible that although the financial cost is greater in Europe, less regulation may make it relatively cheaper. Glaeser and Cutler find, however, that there is generally less regulation for smoking in the U.S. The U.S. does regulate smoking in public places and workplaces, but most European countries do as well. Using data from WHO, the authors determine that the average of the index for the European Union is 1.97, compared to the value of 1.0 in the U.S. The higher index means that regulation is greater in Europe. The authors go on to study whether increased regulation decreases smoking. They do not discover a statistically significant relationship between the two. They cite other studies that suggest increased regulations deter smoking. They conclude that there are other factors not controlled for which skew their finding that more regulation does not equal less smoking.

The second factor examined is the inverse relationship between smoking and income. In the United States, richer people and more-educated people smoke less. People in the top fifth of income smoke 30% less than those in the bottom fifth. In Europe, the smoking/income relationship is flat. The authors find that an increase in income of $10,000 per person reduces smoking rates by 2.1%. The mean income of the European countries studied is about $25,000 dollars in 2000 while the U.S. mean is $36,000, for a difference of about 36 percent. Plugging these values into their formula, Cutler and Glaeser determine that income affects smoking rates by 2.6%, which is roughly one-quarter of the total difference in smoking between the U.S. and Europe.

The authors find that the third reason to be the most important: Americans smoke less because they are the most likely to find smoking unhealthy and choose to avoid the health consequence. Using different estimates of the relation between beliefs and cigarette consumption, they estimate that this difference in beliefs about the damages of smoking can explain between one-quarter and on-half of the total smoking difference between the U.S. and Europe. Roughly 91% of Americans compared to 84% of Europeans believe that smoking causes cancer.

Although the belief of the cancer-causing role of cigarettes in some European countries, like Finland, Greece, Norway, and Portugal, is nearly the same as those in the U.S., some places like Germany have much weaker beliefs. Only 73% of Germans believe that smoking causes cancer. The authors believe that on the whole European anti-smoking groups were much weaker and less effective at influencing public opinion than groups in the U.S. This difference is interesting because the U.S. is generally considered to have a lower inclination towards regulation and paternalism.

U.S. smoking history suggests that entrepreneurial actions of anti-smoking interest groups were quite important. The drop in smoking in the United States in the 1960s is coupled with the release of the warning by the Surgeon General in 1964 and the famous 1952 article in Reader’s Digest called “Cancer by the Carton.” The authors credit groups like the American Medical Association as having effectively used the market to influence beliefs and the government. According to this view, although greater U.S. entrepreneurship and economic openness caused more smoking during an earlier era (and still leads to more obesity today), it also led to a quicker change in beliefs about the damages of smoking which ultimately decreased smoking.

My view

I really like articles by Edward Glaesar. This is my third or fourth article by him. This article was not my favorite, however. I do not understand several things in this article. First, if lower smoking prices means that Americans should smoke 20% more, we should be trying to account for 120% of the difference between American and European smokers. This article only covers at most 70% (20% for the inverse income/smoking relation and 50% for differences in beliefs about smoking damages.) Second, I do not agree with the way that they determine the effects of beliefs on smoking levels. They compare views of smoking on smokers and non-smokers and use this to determine the total effect. I did not follow that logic.

Also, using the logic that Americans understand the damages of smoking more, Americans should be less obese. Being obese is also terrible for your health. Americans should know that better than anyone. The authors discuss this idea saying that the American economic system promotes obesity but they do not differentiate smoking and obesity at all.

The article discusses the low propensity of paternalism in the United States. I disagree with that. We have stricter regulations for drinking (21 is the drinking age) and embrace our Puritanical routes. While Clinton’s actions in the Oval Office with an intern generate a lot of media attention, the Prime Minister of France has a whole other family that is rarely mentioned. I think the reason why Americans smoke less has little to do with a negative income effect. I believe that Americans see smoking as a vice on top of being unhealthy, and this public view drives people away from smoking. I think smoking is “uncool” in the United States, and this fact discourages it more than the health risks.

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