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COLUMBUS, Ohio – Maybe packs of cigarettes should come with a
new warning:
"Smoking is hazardous to your wealth."
A new study suggests that typical non-smokers’ net worth is
roughly 50 percent higher than that of light smokers and about
twice the level of that of heavy smokers.
And that wealth gap grows by about $410, or 4 percent, each
year that a person continues to smoke, said Jay Zagorsky,
author of the study and a research scientist at Ohio State
University’s Center for Human Resource Research.
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Even after these factors are taken into account, heavy
smokers had a net worth that was about $8,300 less than
non-smokers, while light smokers’ net worth was about $2,000
lower.
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Federal
statistics on cigarette spending suggest that the wealth
reductions are roughly equal to how much smokers spend on
their habit.
“We don’t have any direct proof, but taking the study results
and the federal statistics together, it seems that the money
smokers spend on cigarettes comes out of income that normally
would be saved,” Zagorsky said.
“It may be that smokers spend as much as others on everything
else, and pay for smoking out of potential savings.”
The study was published in the current issue of the journal
Tobacco Control.
The study used data involving about 8,900 people who
participated in the National Longitudinal Survey of Youth,
which is funded primarily by the U.S. Bureau of Labor
Statistics. The NLSY is a nationally representative survey of
people nationwide conducted by Ohio State’s Center for Human
Resource Research.
The people in this study were interviewed in 1985, 1992, 1994,
and 1998 about a variety of issues, including smoking and
wealth.
In this study, light smokers were defined as those who
reported smoking less than a pack a day on average, while
heavy smokers used more than a pack a day. Wealth included
home values, cash savings, stocks, bonds, and auto values,
among other assets. Outstanding debts were subtracted from
that total.
The participants in this study were between 33 and 40 years
old in 1998, the last year of this study, Zagorsky said. By
that time in their lives, they had not accumulated much
wealth. The average net worth of all participants in 1998 was
about $50,000.
While it was obvious that smokers had less wealth, Zagorsky
said smokers also tend to come from lower socioeconomic
categories, which may influence how much wealth they
accumulate. So he analyzed the data taking into account many
factors that may influence wealth, including education, race,
and even income.
Even after these factors are taken into account, heavy smokers
had a net worth that was about $8,300 less than non-smokers,
while light smokers’ net worth was about $2,000 lower.
In 2001, the typical smoker spent $715 per year on tobacco
products. Multiplying this by the 7.5 years young baby boomers
typically have smoked shows that the average baby boomer has
spent more than $5,300 during their adult life on this habit.
This figure is roughly right between the amount net worth
falls for light smokers vs. heavy smokers, he said.
Zagorsky noted that the participants in this study were
relatively young adults, with the oldest being 40 years old
when the study concluded. That suggests the wealth gap could
grow even larger if smokers continue their habit.
“Every year of smoking causes net worth to fall by almost 4
percent, so the effects add up over the years,” he said.
“Since the typical family in the United States currently has
relatively little wealth and saves relatively little money,
the financial implications are clear – if you smoke and want
to increase your wealth, stop smoking.”
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Contact: Jay Zagorsky, Zagorsky.1@osu.edu
Written by Jeff Grabmeier, (614) 292-8457; Grabmeier.1@osu.edu
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