Does spending more on tobacco control programs make economic sense? An incremental benefit-cost analysis using panel data

This paper presents a benefit-cost analysis of the ongoing, state-level tobacco prevention and control programs in the United States. Using state-level panel data for the years 1991-2007, the study applies several variants of econometric modeling approaches to estimate the state-level tobacco demand. The paper finds a statistically significant evidence of a sustained and steadily increasing long-run impact of the tobacco control program spending on cigarette demand in states. The study also shows that, If individual states follow the Best Practices funding guidelines, potential fixture annual benefits of the tobacco control program can he as high as 14-20 times the cost of program implementation. (JEL C2, H5, 11)