[Paleopsych] NYT: Cigarettes, Taxes and Thin French Women

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Cigarettes, Taxes and Thin French Women
http://www.nytimes.com/2005/07/24/business/yourmoney/24view.html

    By DANIEL GROSS

    THE obesity epidemic isn't just a growing health risk; it's also a
    problem for the economy. The percentage of Americans over 20 who are
    regarded as obese has more than doubled, to about 30 percent, from
    about 14 percent in the early 1970's. And the Centers for Disease
    Control and Prevention says obesity was responsible for 112,000
    premature deaths in 2002, and for $75 billion in medical costs in
    2003.

    But as the United States lost the battle against the bulge, it waged a
    more successful campaign against another menace to public health:
    smoking. Because of an aggressive public information campaign, new
    restrictive laws and huge increases in federal and state taxes, the
    percentage of the population that smoked fell to 22.5 percent in 2002,
    from 37 percent in 1970.

    Strange as it may sound at first, many economists and health care
    experts say they believe that the two trends may be related. Experts
    blame factors ranging from urban sprawl to junk-food-laden diets for
    the increase in the number of Americans who are obese - defined as
    having a body mass index of over 30.

    But smoking, or the decline of smoking, may also play a role. Nicotine
    is a stimulant, which means that smokers burn calories faster. And
    it's an appetite suppressant, which means that smokers eat less.
    Consider "French Women Don't Get Fat," the best selling book. Some
    critics said that the real reason chic Parisian women stayed trim
    while gorging themselves on croissants was that they smoked more than
    their American counterparts.

    Indeed, conventional wisdom, soundly rooted in the personal experience
    of millions of former smokers and in several studies, has long held
    that short-term weight gain is the price to be paid for quitting
    smoking. But economists are increasingly applying their tools to
    measure the way monetary incentives, or disincentives, affect all
    sorts of human behavior - and hence the ability of government policy
    to alter it. And they've been wondering whether high cigarette taxes,
    which are intended to encourage people to quit smoking, may have the
    unintended effect of redirecting them from one form of unhealthy
    behavior to another.

    According to William Orzechowski and Rob Walker, two economic
    consultants based in Arlington, Va., the price of a pack of cigarettes
    rose to $3.37 a pack in 2001 from 63 cents in 1980, thanks in large
    measure to various state and federal tax increases. (Adjusted for
    inflation, that's a 164 percent gain.) And smokers responded the way
    any economically rational consumer would, despite the fact that many
    felt as if they were addicted: they stopped using the product as it
    became more expensive. Broadly speaking, said Michael Grossman, an
    economics professor at the Graduate Center of the City University of
    New York, a 10 percent increase in the price of cigarettes leads to a
    5 percent reduction in cigarette consumption.

    But the fear of gaining weight as a result of quitting may have
    discouraged some smokers from stopping - and apparently with good
    reason. In a 2004 study, Professor Grossman, along with Shin-Yi Chou
    of Lehigh University and Inas Rashad of Georgia State, mined
    state-by-state behavioral surveys from 1984 to 1999 to get to the root
    causes of rising obesity. While they found that the prevalence of
    fast-food restaurants was responsible for most of the climb, they
    concluded that the decline in smoking accounted for about 20 percent
    of it. Over all, they found that "each 10 percent increase in the real
    price of cigarettes produces a 2 percent increase in the number of
    obese people, other things being equal."

    Jonathan Gruber, an economist at the Massachusetts Institute of
    Technology, didn't believe that the relationship between lower smoking
    and higher obesity rates was so direct. While people may gain weight
    when they quit smoking, they tend to shed those pounds later. "There's
    no evidence in the medical literature that quitting smoking will
    affect your weight over a long period of time," he said. And by
    themselves, the short-term weight gains associated with smoking
    shouldn't be enough to push masses of former smokers into obesity.

    Professor Gruber, with the assistance of Michael Frakes, a Ph.D.
    student, analyzed the same numbers that Professors Grossman, Chou and
    Rashad did, but with different methodology. Rather than focusing on
    the way prices affected consumption, Professor Gruber looked at how
    people living in different states reacted when state cigarette taxes
    were sharply increased. He also ignored factors like the number of
    fast-food restaurants. His method allowed him to isolate the way
    sudden government-imposed price increases affected consumer behavior.
    And when he compared the results with obesity figures in the states,
    he reached a surprising conclusion. "Raising cigarette taxes causes
    smoking to fall, but it doesn't lead to obesity," Professor Gruber
    said. "If anything, it was lower."

    There are a maze of possibilities for this explanation - beyond
    economics. Perhaps the conventional wisdom is wrong about stopping
    smoking and gaining weight. Or perhaps people who quit smoking decide
    at the same time to start exercising more and to watch their weight.
    Professor Grossman finds the results intriguing, but he is not
    prepared to embrace them wholeheartedly. "If you come up with a
    counterintuitive finding like this," he said, "you have to ask if
    you've gone too far."

    Professor Gruber says his results need further testing. But if borne
    out, the findings would add to the evidence in favor of high cigarette
    taxes. After all, what other act of government has been shown to raise
    needed government revenue and discourage citizens from engaging in an
    expensive, unhealthful habit - all while helping them shed a few
    pounds?

    Daniel Gross writes the "Moneybox" column for Slate.com.