A Placebo a Day Keeps the Superbugs Away An investigation into the feasibility of placebo prescription
Virus has taken over our minds. COVID-19 surrounds us all on the news, on social media, and within our own personal circles. The question that people find themselves asking—inevitably— is, “How can this be treated?”. This precise question has worked its way across the world, and it certainly has attracted the attention of those highest up on both the medical and policy hierarchies. While scientists slave away all day at discovering a cure, politicians have suggested remedies ranging from cow urine to ingesting disinfectants to anti-malaria drugs. Many people in positions of authority have resorted to telling medical professionals to, essentially, throw treatments at the wall and see what sticks. This attitude is dangerous and irresponsible, as it imperils the wellbeing of the most vulnerable. But it turns out that this type of behavior has manifested itself in other ways that may not be getting the same type of attention. One threat that seems distant at the moment is that of superbugs. Superbugs are strains of bacteria that cannot be eliminated by the antibiotics we use today. Currently, every time someone uses common antibiotics, most of the bacteria attacking their body is combatted, but not entirely eliminated. A small fraction remains because it is resistant to the drug, and these bacteria can infect others, leading to untreatable infections. According to the 2019 Antibiotic Resistance (AR) Threats Report from the CDC, antibiotic-resistant bacteria infect 2.8 million people in the United States every year and kill over 35,000.1 Comparing this to the 2013 AR Threats Report, the infection rate has increased by 40% and the death rate has increased by 52%—in just 6 years.2 On average, patients with infections caused by antibiotic-resistant bacteria are hospitalized for over 13 days, and the cost of treatment for each of these patients can be as high as $29,000.3 For these reasons, taking antibiotics without a bacterial infection diagnosis could do more harm than good. That is why it is not possible to acquire oral antibiotics over the counter in the United States. It is a doctor’s responsibility to prescribe antibiotics for patients that need them. Doctors take the Hippocratic Oath to “First, do no harm” and uphold ethical standards of conduct.4 But some medical professionals see “doing no harm” as being limited to just what is right in front of them. Occasionally, doctors will prescribe antibiotics for patients with viral infections. They do this for a host of psychological reasons, including patient satisfaction and pressure. But this does not change the fact that antibiotics are designed to fight bacteria, not viruses. According to the CDC and The Pew Charitable Trusts, almost 1 out of every 3 outpatient antibiotic prescriptions is unnecessary; that is 47 million prescriptions every year.5 Additionally, 30-60% of antibiotic treatments prescribed in intensive care units are uncalled for. Even though some antibiotics do have anti-inflammatory properties that could help with inflammation brought about by viral infections, prescribing them to fight viruses, though it might not do too much harm to the patient, does harm society as a whole. 1 “About Antibiotic Resistance.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, 13 Mar. 2020, www.cdc.gov/drugresistance/about.html. 2 “Biggest Threats and Data.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, 13 Mar. 2020, www.cdc.gov/drugresistance/biggest-threats.html. 3 Aslam, et al., “Antibiotic resistance: a rundown of a global crisis” Infection and Drug Resistance 11 (Oct. 10, 2018): 1645-1659, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6188119/. 4 “Greek Medicine – The Hippocratic Oath.” U.S. National Library of Medicine, National Institutes of Health, 7 Feb. 2012, www.nlm.nih.gov/hmd/greek/greek_oath.html. 5 “Why Doctors Prescribe Antibiotics-Even When They Shouldn’t.” The Pew Charitable Trusts, www.pewtrusts.org/en/research-andanalysis/articles/2017/06/30/why-doctors-prescribe-antibiotics-even-when-they-shouldnt. This is an extreme, and often overlooked, case of a negative externality. The more antibiotics are prescribed, the faster bacteria adapt and share their resistance with one another. This is due mostly to natural selection, as the strongest bacteria survive the antibiotics and then reproduce and pass genetic material to other species of bacteria through horizontal gene transfer (HGT).6 This means that antibiotic resistance is not limited to just one individual; these strong bacteria can move from person to person. And it is likely the case that patients are not thinking of the broader impact that their actions have when they demand antibiotics to treat their viral condition. Similarly, it is far easier for a doctor to hand a difficult patient a prescription for antibiotics in order to appease them than it is for that doctor to consider the societal impact of that prescription. Not to mention, they would be challenging their patient directly. As a result, we end up with ever stronger bacteria. We give in to the mentality that any medicine might “cure” us of what is causing our pain, even if it has no real proven effect. This is a serious example of future discounting, where people suffering in the present day want to do whatever they can to alleviate their discomfort, even if it is at the detriment of their future selves or future generations. Each year that people think this way, the closer we all get to being in monumental trouble, as evidenced by the increase in drug resistant bacterial infections and deaths over the years. That begs the question, is doing something that seems so small and insignificant—just to please one demanding patient— worth jeopardizing the future of our collective whole? And to whom are doctors beholden through their Hippocratic Oath? Do they have more of a commitment to their own patients’ whims or to the entire human race’s prosperity? I am not a doctor. I have not lived through 12 years of highly specialized training. I have not formally taken a Hippocratic Oath myself. But I do consider myself to be a person with strong morals, a sense of what’s right and what’s wrong. To me, prescribing an antibiotic to a patient with a viral infection simply because they demanded it is shortsighted and negligent. If doctors are prescribing antibiotics simply to get their patients to relax and leave the office, it would be far better for the health of future generations if, instead, those doctors prescribed placebos. It does not escape me that this practice is considered highly unethical. But I wonder, why exactly this is more unethical than prescribing antibiotics to people that will not benefit from it, only to hurt everybody else? Is exercising professional judgement over a patient’s condition and treatment wrong when it comes to medicine? Physicians understand the threat posed to the human race if they keep prescribing antibiotics when it is clear that the drugs themselves will have no effect on the patients. For that reason, prescribing placebo or sugar pills would have the same effect on the patient that antibiotics do—if not better since there would be no risk of side effects—, and there would be no negative externality. I would like to state outright that I do not believe that all patients experience absolutely no benefits from taking antibiotics for viral infections. Their anti-inflammatory properties do help in certain viral cases.7 This is why some physicians use azithromycin—an antibiotic used to treat lower respiratory infections and pneumonia—to treat COVID-19 patients while we wait for a more specific treatment.8 But I would conjecture that, in most cases of unnecessary antibiotic prescription, taking the drug does have positive physiological effects due to the psychological effects of taking medicine in the first place. 6 Ventola, “The Antibiotic Resistance Crisis—Part 1: Causes and Threats.” Pharmacy and Therapeutics 40, no. 4 (Apr. 2015): 277-283, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4378521/ 7 Pradhan, et al., “Anti-inflammatory and Immunomodulatory Effects of Antibiotics and Their Use in Dermatology.” Indian Journal of Dermatology 61, no. 5 (Sep-Oct 2016): 469-481, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5029230/. 8 Gautret, et al., “Hydroxychloroquine and azithromycin as a treatment of COVID-19: results of an open-label non-randomized clinical trial.” International Journal of Antimicrobial Agents (Mar. 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7102549/. A 2011 study run by Bruce Barrett, MD, PhD et al. tests the effect of taking no pills, taking placebos, and taking echinacea—a plant that is widely used to treat the common cold—on the duration of the common cold.9 The researchers found that, when participants were not given any pills (control), on average, their cold symptoms lasted 7.03 days. Those in the group blinded to placebo’s symptoms lasted, on average, 6.87 days. And those in the group blinded to echinacea’s symptoms lasted, on average, 6.34 days. The latter two groups’ symptoms also tended to be less severe. This shows that, regardless of whether the participants were given medication to treat their viral infection, if they thought they were taking medication, they recovered quicker and experienced milder symptoms. This study does not test the effect of antibiotics specifically; however, I am making the assumption that, most of the time—including the common cold—, an antibiotic would have the same effect as a placebo pill when it comes to treating a viral infection. Thus, placebo pills actually have a positive effect on patients infected with certain viruses, and they do not inflict harm onto anyone else in society. This supports the notion that doctors ought to us their discretion and prescribe a placebo or sugar pill to patients who wrongfully demand antibiotics for viral infections. It is not the patient’s place to tell a medical professional what they should or should not do. Besides the current ethical standards, another barrier to placebo prescriptions becoming more widespread is the nature of the patient physician relationship. In the case of viral infections, one would typically consult their primary care physician. This relationship patient physician relationship, in particular, is built on trust, and it is a repeated long-term game. Both parties mutually benefit from working together in every iteration of the game; patients benefit because they receive trustworthy, quality healthcare, and doctors benefit because they retain the business of their clients for a longer period of time. Fundamentally, doctors are market goods. I do not mean to objectify them at all, it just takes many years and a great deal of money to go through the process of becoming a practicing physician. And the only way they earn any wages after many years and hundreds of thousands of dollars in tuition is to have a strong reputation among their clients. A pristine reputation is crucial if they hope to attract patients to their practice. Not only would betraying the trust of a patient ruin that individual patient physician relationship and end the repeated long-term game immediately, because of modern communication technology, burning a bridge with one patient could lead to a cascade. If one client announces to other clients that their shared primary care physician lied or obfuscated the truth about their prescriptions, all of those clients would end their repeated long-term games with that physician. This is certainly a personal cost to consider when it comes to physicians prescribing placebos for viral infections instead of antibiotics. The reputational cost to the physician is not the only one that ought to be considered. Were a patient to discover that their physician prescribed a placebo instead of antibiotics for a viral infection, that patient might be so scarred by the breach of trust that they become hesitant to see a doctor in the future. This could lead to serious health-related issues later on, as those with distrust for medical professionals will choose not to seek help when they need it. Alsan and Wanamaker explore this phenomenon in their paper, “Tuskegee and the Health of Black Men”.10 The infamous Tuskegee Study of Untreated Syphilis in the Negro Male was revealed to be exploitative in 1972, and the authors observe the correlation of medical distrust afterwards. They found that medical distrust and mortality increased among older black men, and the number of doctor’s visits or consultations— inpatient and outpatient—fell. Life expectancy among black men at age 45 dropped by, at most, 1.5 9 Barrett, et al., “Placebo Effects and the Common Cold: A Randomized Controlled Trial.” Annals of Family Medicine 9, no. 4 (Jul. 2011): 312-322, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3133578/. 10 Alsan, Marcella, and Marianne Wanamaker. “Tuskegee and the Health of Black Men.” 2016, doi:10.3386/w2232 years. This further exacerbated the life expectancy gap between black men and white men in the area. Negative publicity about doctors not only hurts the ones directly involved with the event but it hurts how entire medical profession is perceived. That is to say, if a patient distrusts their doctor, they will not only not go back to that doctor; they will be less likely to seek medical help from any doctor in the future. In the case of substituting placebo prescriptions for antibiotics for viral infections, I can imagine that the discovery of this practice might cause a national uproar. This bad press would lead Americans to question whether their physicians have their best interest in mind. As evidenced by the Alsan and Wanamaker study, this has monetary and reputational costs for medical professionals, and it also has real health costs for those that will, consequently, refrain from seeing a doctor. Clearly, the question of prescribing placebos in place of antibiotics for viral infections is far from black and white. There are several potential present-day costs and risks involved, though it would benefit the human race and the cost of healthcare in the long run against superbugs. To me, a twentysomething that plans to live a long life, maintaining the efficacy of current antibiotics for as long as possible is a priority; therefore, it is easy for me to advocate for placebo prescriptions, especially if they do actually help patients overcome some viruses. But I understand that costs such as loss of business for doctors that flout clients’ wishes and poorer health outcomes among those that distrust medical professionals counterbalance the longer-term benefit. Plus, these consequences could last far into the future. And consequently, even if we can delay the evolution of superbugs, we might not actually be in better health due to the widespread aversion to medical professionals. To an economist, it would be worth encouraging doctors to prescribe placebos when their patients demand antibiotics for a virus only if the short- and long-term costs of doing so outweigh the eventual costs of superbugs. This could be done on a surface-level by comparing infection and mortality projections under the two different circumstances—business as usual vs. prescribing placebos—and including different future discounting rates. But this is not just an economic problem, it is, at its core, an ethical one. Who exactly should doctors be taking care of? Why are certain practices repugnant while other—potentially more detrimental—ones are permissible? What do doctors have to prove once they have dedicated their lives to the continued study of medicine? Why does our society force them to do so? These are questions that economics cannot answer as easily, and they are ones that we have certainly been asking ourselves in light of recent events. I suspect we will ask ourselves these more with each passing year, as antibiotic prescriptions continue to be filled. As we creep closer to the inevitable, we will see that the looming danger of superbugs is no longer so distant. And, reminiscent of the COVID-19 Pandemic of 2020, we will only change our behavior once the antibiotic-resistant microbes present an undeniable, dreadful threat. I just hope that it won’t be too late. “Op-Ed” Rubric Requirements: 4-6 page double spaced (loose upper bound) “opinion editorial” or essay on a topic relating to health economics. The op-ed is not a research project, but a research project would be acceptable for those who wish to conduct original (qualitative or quantitative) research. Page limit does not include references or title page. Analytic or quantitative component: The op-ed must have either a quantitative (e.g., data analysis or statistical analysis) OR an analytic component (e.g., view a certain issue through an health economics lens such as the Grossman model, Rothschild Stiglitz, moral hazard, cost-benefit analysis, etc.). The analysis does NOT need to be sophisticated analysis (although that is also welcomed). Examples of acceptable analysis) in the popular media: here, here, and here. These are purely illustrative examples of the analysis portion and not the entire op-ed. Grading Rubric: (out of 40) Subject matter relevance: /5 Is this health economics? We cover almost all corners of health economics in this class, so is your topic related to one of the lectures? It doesn’t need to be perfectly related. For example, pharmaceutical pricing, vaccine R&D, health in developing countries, etc. would certainly be health economics, even if they’re only tangentially related to some of the lectures. Quantitative/analytic component: /15 The op-ed must have a quantitative or analytic component. This can range from downloading small public datasets and running your own analysis or using multiple detailed statistics or research findings from other sources to form coherent arguments or applying an economic model (e.g., Rothschild-Stiglitz, Grossman, econ epidemiology, etc.) to your subject matter. Presentation of results: /5 Are you explaining your analyses in a straightforward way? Can an average BA in economics student understand your analyses? If you are using exhibits or a model, are they clean and neat? (e.g., properly labeled, annotated etc.; if it’s from another source, are you citing it?) Background research and final stance: /5 Have you done sufficient background research on the topic? Are you presenting both sides (doesn’t need to be equally)? Finally, do you reach a conclusion? This could be in the form of taking a stance (like an op-ed) or recognizing that the topic or solution is nuanced. If the latter, make sure you’re assertive and explicit about why. The final stance doesn’t need to be highly opinionated, but avoid a passive conclusion. Clarity in exposition: /10 This is the closest to grading your writing. But we are not grading the writing style but just the clarity in your writing and arguments. Are your arguments well-structured? Does the essay follow a logical sequence? Many of you will go on to careers that emphasize writing (e.g., public agencies, consulting, academia), so this is a good place to start. Living on the Edge: Sarnia’s Pollution Catastrophe and its Effects on Health Outcomes Arnold Normal Yellowman, a member of the Aamjiwnaang First Nation’s Reserve, explains in an interview that his family lives under the effects of various unwanted sounds such as those of warning sirens, rumbles from trucks and other industrial noises (O’Toole & KestlerD’Amours, 2019). These undesirable noises, along with several other circumstances, are consequences of the industrial development that has created what is now globally known as the “Chemical Valley ” in Sarnia, Ontario. As Yellowman states while describing his current environment: “That’s the north wind. It comes from Esso or Imperial Oil, if the wind blows from this direction, it’s Suncor – used to be Dow. And if the wind blows over this way, it’s Shell, ethanol, Dupont. If it blows from the south, it’s Nova Chemicals” (O’Toole & Kestler-D’Amours, 2019). As noticed above, the factories surrounding the homes of the Aamjiwnaang community emit noise and light pollution, as well as various odors that cause discomfort to the residents. Moreso, the factories contribute to severe air pollution emissions that lead to unforeseen and long term health consequences. In the case of the Aamjiwnaang residents, relocating is not an option because they have formed ancenstorial bonds with their land, so they are left to suffer the consequences of the development of local industry. The Chemical Valley is an example of environmental racism in that there exists a disproportionate localization of harmful and hazardous industries surrounding a marginalized group. Environmental racism refers to an increase in placement of hazardous industries in areas with communities of color including Indigenous Peoples. It is often that the communities targeted also have a lower general socioeconomic status and are more distanced from healthcare facilities (O’Toole & Kestler-D’Amours, 2019). Indigenous healthcare in Canada is delivered regionally by provinces, territories, and the Non-Insured Health Benefits Program (NIHB) (Gouldhawke, 2021). Indigenous Peoples experience disparities in healthcare accessibility and availability, which results in depleted health outcomes of the population (NCCIH, 2019). More so historic experiences with government-offered health care has caused a mistrust between Indigenous patients and practitioners (Lux, 2016). Geographic distances, inadequacies in healthcare systems, and understaffing also decrease the accessibility of healthcare to Indigenous Peoples (NCCIH, 2019). Other concerns affecting Indigenous communities include longwaitlesist, high out-of-pocket costs, lack of communication on the insurance options, and a shortage of doctor and nurse availability. All of these concerns impact Indigenous health outcomes, however not much research has been done exploring the impacts of negative externalities from local industries on health outcomes. Air pollution is a major contributor to depleted health outcomes of populations surrounding Sarnia, Ontario (Oiamo et al, 2011). In 2005, 46 facilities listed under Canada’s National Pollutant Release Inventory located within 25 km of Sarmia released over 131 million kg of harmful air pollutants, which contributed to 16% of Ontario’s air pollution (MacDonald, 2007). In 2005, Sarnia contributed to 16.5 million tonnes of carbon dioxide emissions. The Aamjiwnaag First Nations community has been exposed to increased level of pollution causing serious health issues such as miscarriages, chronic headaches and asthma attacks, and previously researchers have found it challenging to formally link these depleted health effects to pollution from the companies directly (CBC, 2013). However, increased levels of air pollution in the area inspired Oiamo and their team of researchers at Western University to conduct a study called “Air Pollution and General Practitioner Access and Utilization: A Population Based Study in Sarnia, ‘Chemical Valley,’ Ontario” (2011). The objective of this study is to measure whether increased persistence of air pollutants leads to increased usage of general healthcare practitioners. Recent health related research outlines the importance of considering socio-economic and environmental determinants as ones that cause disparities in health-care access, despite the fact that Canada is deemed to offer universal healthcare to all communities (Oiamo et al, 2011). With a population of 71,419 people, Sarnia is located in the area of the St. Clair River Area of Concern due to various unforeseen connections between the environmental circumstances and depleted health outcomes of the population. It is estimated that in 2005, air pollution caused 270 hospital admissions, 100 premature deaths, 920 emergency visits, and 471700 minor illness days (OMA, 2005). Moreso, the Aamjiwnaang First Nation’s Reserve has been subject to an anomaly caused by pollution accumulation where the gender ratio of females to males is 2:1 (Mackenzie et al, 2005). Given this previous research, Western University assessed the connection between the determinants of health such as environmental pollution and health care access and utilization to influences of air pollution (Oiamo et al, 2011). The study first measured ambient air pollution concentrations of nitrogen dioxide, sulfur dioxide and several volatile organic compounds referred to as BTEX in this study at 39 locations in Sarnia over the span of two weeks, and exposure to outdoor stimuli such as gas, dust, fumes and pesticides, and indoor stimuli such as pets, carpets, rugs and fireplace were also assessed. In order to assess whether individuals of a lower socio-economic class had been more affected by the pollution, the research team also collected demographic data from participants. The socioeconomic demographic factors considered in this study included whether participants graduated from highschool, whether they are living below the low-income cut off, their employment status, and their housing conditions. Health behaviors such as the frequency of monthly alcohol use, smoking, hours of exercise, and frequency of voluntary medical check-ups were also noted. People’s community and environmental perception, healthcare travel and wait times, health status were also taken into account. Finally, the two main healthcare outcomes that were assessed included healthcare access and healthcare utilization. In this study, there were two methodologies, the use of a Land Use Regression Model to determine exposures to pollution and a Logistic Regression Model to explore the influences of environmental factors, socioeconomic and health related factors on the access to general practitioners and utilization outcomes. The results of the study show that participants who had consulted with general practitioners have been exposed to more nitrogen dioxide and sulfur dioxide. For example, the median concentration of BTEX volatile organic compounds was higher for those who engaged in the utilization of general practitioners and for those who did not have access to general practitioners. Furthermore, the results of the study show that “higher levels of exposure to NO2 and SO2 significantly increased the likelihood of seeing a doctor by 1660% during the 2 weeks that the monitoring took place” (Oiamo et al, 2011). Another key result of the study was that “ high exposure respondents faced stranger barriers to regular primary care when compared to those in lower pollution areas” (Oiamo et al, 2011). In general the results of the study demonstrate that there exist interrelations between health-care access and utilization, and pollution. This article appears to be the most formal study completed with the objective to measure impacts that air pollution has on health outcomes of the population in Sarnia. However, there exist various considerations for future research on the subject. First of all, a randomized sampling methodology was used to collect participants for the study, meaning that residents from across Sarnia were surveyed to formulate these results. I believe that as a next step studies must be completed in areas that suffer the worst effects of industrial pollution. Specifically inquiring into the relationship between pollution and health outcomes on the Aamjiwnaang reserve would give us a better idea about the adverse health effects of the local industry on the Indigenous community. Moreso, the article was completed in 2011 with some data being taken from 2005. Given that particles that make up air pollution often bioaccumulate, it is important to constantly monitor emissions and their effects, as well as offer health support to those who need it most. In general, I believe that there is a need to conduct more recent and in-depth studies in Sarnia. In conclusion, Oiamo’s study provides a foundation that should promote governments to initiate community engaged action aiming to give voice to those affected by environmental racism and who suffer depleted health outcomes due to their surrounding environment. Further research must be completed on the effects of the negative externalities of industrial development in order to implement proper measures of controlling emissions. Furthermore, we need to provide better access to health care for those communities that are affected by environmental pollution specifically. By raising these questions, communities such as those living on the Aamjiwnaang reserve can speak up about the support they need in their community to improve both health outcomes and the general quality of life. References First Nations exposed to pollutants in ‘Chemical Valley’ | CBC News. (2013, November 24). Retrieved April 24, 2022, from https://www.cbc.ca/news/canada/windsor/first-nations-exposed-to-pollutants-in-chemical -valley-1.2438724 Gouldhawke, M. (2021, February 05). The failure of Federal Indigenous Healthcare Policy in Canada. Retrieved April 25, 2022, from https://yellowheadinstitute.org/2021/02/04/thefailure-of-federal-indigenous-healthcare-p olicy-in-canada/ Lux, M. (2016). Separate beds: A history of Indian hospitals in Canada, 1920s-1980s. Toronto, ON: University of Toronto Press. MacDonald, E., & Rang, S. (2007, October). Exposing Canada’s Chemical Valley. Retrieved April 24, 2022, from https://web.archive.org/web/20120714070103/http://www.ecojustice.ca/publications/repo rts/report-exposing-canadas-chemical-valley/attachment Mackenzie CA, Lockridge A, Keith M: Declining sex ratio in a First Nation community. Environmental Health Perspectives. 2005, 113: 1295-1298. 10.1289/ehp.8479. NCCIH. (2019). ACCESS TO HEALTH SERVICES AS A SOCIAL DETERMINANT OF FIRST NATIONS, INUIT AND MÉTIS HEALTH. Retrieved April 24, 2022, from https://www.nccih.ca/docs/determinants/FS-AccessHealthServicesSDOH-2019-EN.pdf Ontario MedicalAssociation: Illness Costs of Air Pollution (ICAP) – Regional Data for 2005 (with projections to 2026). 2005, http://www.oma.org/phealth/smogmain.htm Oiamo, Tor H, et al. “Air Pollution and General Practitioner Access and Utilization: A Population Based Study in Sarnia, ‘Chemical Valley,’ Ontario – Environmental Health.” BioMed Central, BioMed Central, 9 Aug. 2011, https://ehjournal.biomedcentral.com/articles/10.1186/1476-069X-10-71#Fig2. O’Toole, M., & Kestler-D’Amours, J. (2021, December 09). Toxic legacy: The fight to end environmental racism in Canada. Retrieved April 24, 2022, from https://pulitzercenter.org/stories/toxic-legacy-fight-end-environmental-racism-canada Positive Smoke: Tobacco Consumption and the French Economy Over half of smokers worldwide will die by their beloved vice. In 2020 the threat of tobacco consumption is well understood (often to a desensitized fault), albeit remains the number one cause of preventable death globally, claiming 8 million lives annually. As a middle-class American educated in the public system, anti-tobacco campaigns were omnipresent. The antismoking crusade was supplemented by my parents pleading—begging—me not to smoke when I returned home. Regardless, seven years ago I lit up my first cigarette have been smoking on and off since. Why? Because my friends did. Why don’t I stop? I’ve built my life around it. Perhaps one can blame my grandmother who smoked three packs a day, or maybe it was inevitable given my personality. Whatever reason, it remains undeniable that my first puff cost and continues to cost the government a lot of money. After many years of government educational programs specifically designed to keep students like me from smoking, I still find myself part of the enemy team. As an economics student, I must ask: at what cost? The virtual eradication of smoking amongst youth before the JUUL was one of America’s greatest health crusades of the century, coming at no small price. The California state government spends an average of $82 per resident annually in anti-smoking advertisements, and it is estimated to cost the government an average of $480 each time a smoker attempts to quit. This does not even account for private health organizations that launch million-dollar campaigns against youth smoking annually. Using myself as an example, the government alone has spent $9,484 with an undesirable outcome. During my sophomore year as an economics student, I remember doing some rough calculations on how much my vice was costing me on an annual basis in hopes it motivated me to really stop this time. In typical Stanford student fashion, I then began calculating the government (taxpayer) burden in an attempt to keep me from smoking. I remember being horrified at both figures, but more surprised at the latter. This piqued my interest in the economics of smoking, so to speak. I became fascinated by this area of our economy that became to define the economic term of irrationality for me. Spring of my sophomore year I gave an enthralling (and perhaps shocking) presentation for my Behavioral Economics course, in which I modeled addiction and repetitive quitting as a rational behavior despite negative outcomes (withdrawal, costs of smoking cessation devices, etc.). It was during this project I began looking at the numbers produced by both the CDC and WHO on the economic burden smoking creates for society. Not the incessantly dry mouth, tooth pains, and shakes. The hard numbers. The World Bank estimates that smoking costs the global economy $1.4 trillion annually and the U.S. economy between $300-500 billion, per the CDC. The magnitude of these numbers raised immediate suspicion— after all, America continues to have an ambitious plan to eradicate smoking in our country. Their guise as fact could make them the perfect political pawn to help politicians easily raise cigarette taxes without public backlash. After all, numbers are objective, right? I remember back to my initial time spent in Paris when the shock of a parent smoking while pushing a stroller sent me into a state of shock. The French did not understand the economic impact smoking was causing their economy, but it turns out they may understand it better than anyone else. I remember turning on the television to watch Le Dèbat du Soir sur TVMonde5 and the recent augmentation of cigarette prices was being debated. One of the anchors began to argue the importance of smoking for the French economy. I’m not talking about cigarette production, most of which ironically comes from the United States. I’m talking about its effect on the pension system. While the anchor’s statement was made in cynical jest, I realized he had a valid point within the context of the French economy. Studies concerning the economics of smoking and the undue “burden” they place on society neglect the positive economic externalities of these ritual sticks. In the most basic of economic frameworks, we can imagine a two-dimensional graph of price and quantity with our supply and demand curves. In the free market, the supply and demand will equilibrate to produce our prices and quantities found within a competitive tobacco market. Somewhere down the road, governments begin to understand the dangers of smoking placed on their citizens and the general society; cigarette butts, the disagreeable odor, devastating fire, various cancers, and premature death. This endless list of negatives requires us to change our conceptual understanding of this market. Now we must visualize the social marginal cost (SMC) this places on society as laying above our initial demand curve. Thus, our social optimum quantity is less than what the free market dictates and the government decides to intervene. Nudging us towards our social optimum, the government imposes a regressive tax on cigarettes that simultaneously increases price and decreases demand. Being a use tax, it is designed such that only those participating in this harmful activity will be paying the tax; these taxes will then help offset future medical bills and other economic costs that arise later in a smoker’s life. This is how the tax is justified, yet in reality, smokers are consistently the poorest and most uneducated of society, usually consisting of minority groups. Research shows that education and socioeconomic status play a significant role in health outcomes, thus this regressive tax may be unwarranted. We are disproportionately taxing minority and low-income groups who generally already have worse health outcomes—cigarettes aside—and justifying our tax by blaming them for poor life choices. Numerically, who decides the socially optimum level with this tax? Who decides what the deadweight loss is to society if we leave the tobacco market free? Previous studies calculate this through healthcare expenditures and loss of productivity. While I follow this logic, I follow this logic, I believe it to be incomplete. While healthcare expenditures are greater for smokers, users are already paying their fair share through this use tax. If we assume smoking will eliminate 13 years of a smoker’s life and the average life expectancy is 82.73, then we can assume a smoker will live on average until approximately 70 years old. 90% of smokers begin smoking by the age of 18 and close to 100% begin by the age of 26. Therefore, the average individual has 44 years of smoking. With 47 billion cigarettes smokes in France last year and 18 million smokers, that leaves us with 131 packs smoked per year. At €10 a pack ¾ of which are taxes, the individual is paying €982 in taxes per year. Therefore, the average individual is paying €43,230 into the system through their life as a smoker. This is significant, particularly as many smokers die of natural causes not requiring medical treatment. It is impossible to understand who died solely of natural causes and who died of smoking-related illnesses. In most major studies, the bills of hospitalized patients who die or related maladies are calculated into the overall economic cost. Perhaps most interesting is the argument regarding productivity. According to France’s calculation of economic cost, a significant portion is “loss of productivity” due to early mortality. What is interesting is that in the context of France, this doesn’t make much sense. France is well known for having one of the largest and most generous pension systems that leave the state under great financial strain. It is consistently under intense financial strain, so much so that Macron has been attempting a reform, despite his political reputation. France has an average retirement age of 62, with an average of €1,400 paid monthly into perpetuity. These individuals are not working and taking money from the state. This is not a moral condemnation of a pension system, but an emphasis that these are not productive agents in an economy. Therefore, to have them pass early saves the government a significant amount of money, numerically speaking. Again, if we assume the average Frenchman of age is receiving €1,400/month, that is €16,800 annually. If smoking reducing an individual’s life by an average of 13 years, that is saving the government €218,000 per smoker without discounting. While this calculation is rather morbid, it is necessary to understand the true economic burden smoking places on French society. In all the government “receives” approximately €262,000 per smoker throughout his or her lifetime. Therefore, to say smokers are placing an undue burden on French society through increased healthcare expenditure is more debatable than anticipated. Often these economic calculations fail to take into account pension costs and the understanding that not all deaths of smokers are directly related to smoking. This argument does not even touch upon other measures that are difficult or impossible to quantify: productivity boosts from taking designated breaks, industrial benefits for the country, networking opportunities through the social benefits cigarettes offer their users. I will cease to be horrified when a French mother smokes while holding her baby, perhaps I will now understand it. She is simply ensuring the future sustainability of France’s pension system. Bibliography Bloomberg.com, Bloomberg, www.bloomberg.com/news/articles/2019-12-11/macron-snewfrench-pension-system-to-come-into-force-from-2025. Breeden, Aurelien. “France Pension Protests: Why Unions Are Up in Arms Against Macron.” The New York Times, The New York Times, 17 Dec. 2019, www.nytimes.com/2019/12/17/world/europe/france-pension-protests.html. “Burden of Cigarette Use in the U.S.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, 23 Mar. 2020, www.cdc.gov/tobacco/campaign/tips/resources/data/cigarette-smoking-inunitedstates.html. “Cigarette Taxes: Issues and Options.” ITEP, itep.org/cigarette-taxes-issues-and-options-1/. Ekpu, Victor U, and Abraham K Brown. “The Economic Impact of Smoking and of Reducing Smoking Prevalence: Review of Evidence.” Tobacco Use Insights, Libertas Academica, 14 July 2015, www.ncbi.nlm.nih.gov/pubmed/26242225. “The French Social Security System III – Retirement.” Retour à La Page D’accueil, www.cleiss.fr/docs/regimes/regime_france/an_3.html. “Prevalence of Tobacco Smoking.” World Health Organization, World Health Organization, 10 Oct. 2016, www.who.int/gho/tobacco/use/en/. Remler, Dahlia K. “Poor Smokers, Poor Quitters, and Cigarette Tax Regressivity.” American Journal of Public Health, © American Journal of Public Health 2004, Feb. 2004, www.ncbi.nlm.nih.gov/pmc/articles/PMC1448232/. “Smoking Prevalence, Males (% of Adults).” Data, data.worldbank.org/indicator/SH.PRV.SMOK.MA. “Stop Smoking: It’s Deadly and Bad for the Economy.” World Bank, www.worldbank.org/en/news/infographic/2017/05/31/stop-smoking-its-deadly-andbadfor-the-economy. “Tobacco.” World Health Organization, World Health Organization, www.who.int/newsroom/fact-sheets/detail/tobacco. “Understanding the French Pension System • Personal Finance in France.” This Is Lyon Is a Website Dedicated to Lyon France, thisislyon.fr/tips-andadvice/personalfinance/understanding-the-french-pension-system/.
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