Leverage Factor

The New England Journal of Medicine reports on Global Effects of Smoking, of Quitting, and of Taxing Tobacco.

Tripling global tobacco taxes would it is estimated save 200 million lives this century. Concerns about the welfare reducing effects of increased tobacco prices seem irrelevant for an addictive product.

The problem is the tobacco industries world wide profits of $50b in 2012 "yield enormous political influence that is used ... to try and prevent tax increases".

Here are the some US lobbying expenditures (OpenSecrets.org):

2012 lobbying
all $3300m
Pharmaceuticals/health products $234m
TV/movies/music $118m
Commerical banks $61m
Tobacco $27m
National Rifle Association $3m

There are thus probably limits to the ability of the tobacco industry to use its profits to exert influence. At a rough guess we estimate tobacco lobbying is unlikely to exceed that of the largest lobbying group, pharmaceuticals/health products (9 times larger than tobacco's current level). Once you have more lobbyists than congress people, attempting additional lobbying is unlikely to gain much traction.

We guesstimate an upper bound on the world wide amount of lobbying expenditures the tobacco industry might engage in to preserve its profits at 5-20 times the US level.

We also guesstimate that lobbying in favor of tobacco taxes is likely to be 2-5 times as effective as lobbying against them. This is based on the belief that there are strong arguments in favor delivered by reputable disinterested groups (doctors, public health officials, cancer societies).

We loosely estimate a concerted campaign to instigate such taxes might take 10 years to win. Generally we don't feel confident extrapolating savings beyond 20 years, however, because of the likely continued difficulty in treating tobacco related illness, and the likelihood that most of the burden is likely to fall on low and middle income countries that can't afford expensive treatments, we extrapolate the benefits over 40 years.

Project Cost Real world outcome Outcome estimates Economic value in Western terms
Triple world wide tobacco taxes $234m/year x 5-20 x 10 years / 2-5 = $2.34b-23.4b save 20% of 10m deaths/year for 40 years = 80m life years 10 years of life saved per death prevented; value placed on a year of life $90k $72t

Leverage Factor

3,000 - 30,000