The price of smoking for a lifetime is lowest in the South, highest in the Northeast

A study evaluating the real cost of smoking by state over a lifetime ranked each of the states, finding that over an average lifetime smokers spend about $1 million to $2 million on tobacco-related costs, depending on the state they live in.

The study, conducted by WalletHub, a personal finance website, established the real cost of smoking by state by calculating the costs of six categories:

• Total cost per smoker,

• Out-of-pocket cost,

• Financial opportunity cost,

• Health care cost per smoker,

• Income loss per smoker, and

• Costs associated with second-hand smoke.

“The tobacco industry lives in North Carolina and Missouri, especially,” Jill Gonzalez, a senior analyst with WalletHub, said to The Cancer Letter. “In the South in general, the economy is a little bit more lenient on the tobacco industry—because of that, we see taxes are very low, price per pack is generally a lot lower. There’s not that monetary reason to not smoke.”

North Carolina, Georgia and Missouri are the cheapest states to smoke, both over a lifetime and per year, according to WalletHub. New York, Connecticut, and Washington, D.C. are the most expensive.

In North Carolina, the cheapest place to smoke, a smoker would spend an estimated $1,228,493 on tobacco-related costs over an average smoker’s lifespan of 69 years. In New York, the most expensive state, overall cost came to $2,458,044 over the same lifespan.

The study also evaluated the cost of smoking per year. In one year, a smoker is estimated to pay $24,088 in North Carolina, and $48,197 in New York.

“These numbers would say definitively, no matter where you are, it’s expensive to be a smoker, but it’s definitely a lot less to be smoking in one of those southern states than it is up North,” Gonzalez said.

In the Northeast, vice taxes increase the prices of cigarettes that already cost more than they do in the South, and “even though there are changes going on in the Northeast, we don’t see that really represented in the rankings, because they already were so much more expensive to begin with. We just see that gap widening,” Gonzalez said.

The WalletHub study didn’t establish an association between the cost of smoking and the prevalence of smoking.

However, the prevalence of smoking in North Carolina was estimated to be 17.4% in 2019, according to the United Health Foundation. By comparison, the prevalence of smoking in New York, the most expensive state to smoke over a lifetime, was estimated to be 12.8% in 2019.

WalletHub published its study as the number of Americans in the United States who smoke traditional combustible cigarettes declines, and use of e-cigarettes—especially among youth—rises (The Cancer Letter, Sept. 27, 2019).

The stated purpose of the study is to “encourage the estimated 34.2 million tobacco users in the U.S. to kick the dangerous habit.”

Apples and oranges? 

The WalletHub study’s reporting is relatively accurate, economists say. However, the methodology seems to mix individual with social costs, which can skew the data, they told The Cancer Letter.

The study authors calculated the financial opportunity cost by estimating “the amount of return a person would have earned by instead investing that money in the stock market over the same period.”

But this financial opportunity cost—which stands at $773,539 in North Carolina and $1,708,640 in New York—assumes that smokers would have invested that money, said Kenneth Warner, Avedis Donabedian Distinguished University Professor Emeritus of Public Health, professor emeritus of health management and policy, and dean emeritus of public health at the University of Michigan.

“It’s not what most people are going to do,” Warner said. “Most people are devoting very little, if anything to investment, and certainly, most smokers are devoting very little to investment, because smokers tend to be low-income folks, and low-income folks don’t tend to do a lot of saving.”

The study “mixes apples and oranges,” Warner said. Cigarette spending is purely an individual cost, but health care cost per smoker would be considered a societal cost, he said.

“For example, the spending on cigarettes is an individual cost to the smoker,” Warner said. “The spending on health care is largely subsidized for the smoker, through either government, or private insurance, or some combination. In other words, the smoker is going to pay a share of their health care, but much of it will be paid for through insurance, and then specifically if it’s government insurance like Medicaid or Medicare, that’s something that basically is a complete subsidy to them.”

A smoker would spend about $135,216 on health care over a lifetime in North Carolina, WalletHub estimated. In New York, a smoker would spend $262,289 on health care over a lifetime.

“Putting them all together like this is actually a little misleading, it’s not quite right,” Warner said.

Though the study mixes societal and individual costs, it’s still useful for policymaking at the state level, Wendy Max, professor of health economics and co-director of the Institute for Health & Aging at the University of California, San Francisco, said to The Cancer Letter.

“If you just come up with one national number, it masks a lot of differences that are at the state level,” Max said. “And I mean you could argue that even looking at the state level in a state like California—we found that certain counties have a much greater burden than others.”

State-by-state breakdown of tobacco costs useful to policymakers 

Policymakers could use the WalletHub data to bolster tobacco cessation initiatives with a focus on cost over a lifetime, experts in economics and public health say.

The study helps drive home the real cost of smoking over the course of a lifetime, said Frank Chaloupka, a research professor and economist in the Division of Health Policy and Administration of the University of Illinois at Chicago School of Public Health.

“In addition to the value of cessation, it really brings home to states—in terms of their policymaking—what the real costs are to their populations,” Chaloupka said to The Cancer Letter. “More states should think about raising taxes.”

While a state-by-state breakdown of cigarette-related costs could be used to educate smokers about the lifetime cost of smoking, it will not necessarily influence them the same way aas a state policy, Warner said.

In addition to the value of cessation, it really brings home to states— in terms of their policymaking—what the real costs are to their population. More states should think about raising taxes. 

Frank Chaloupka 

“It will probably motivate some individuals to take action, but if you have policy resolving from a study like this, anti-smoking policy, that would affect large numbers of smokers, for example, this will encourage states to increase their excise taxes, and some of them did so, that will instantly affect large numbers of smokers,” Warner said to The Cancer Letter.

The study estimates something close to annual expenditures incurred by smokers; for policy analysis, a study that estimates lifetime expenditures that separates out true economic costs and transfer payments (such as tax revenues) would be more useful, said James Lightwood, associate adjunct professor with emphasis on health economics and statistics in the Department of Clinical Pharmacy at UCSF.

“[The study] is probably very roughly right, and it should be taken seriously more on a regional basis and, and general patterns rather than specific rankings,” Lightwood said to The Cancer Letter. “What you get from the pattern of colors on the map across the country is probably more accurate than than the exact ranking of any specific state.”

This study wouldn’t necessarily convince an individual to quit smoking, though the state ranking could make a difference, Max said.

“But I think that looking at state-level costs hopefully would convince states they need to put more money towards the cessation,” Max said to The Cancer Letter. “For example, the Medicaid population smokes at much higher rates than the average population.

“There are all kinds of creative programs to get people to quit.”