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News Tips

Tipsheet: Tobacco in Indiana

FOR IMMEDIATE RELEASE
Jan. 4, 2007

EDITORS: The following Indiana University professors are available to discuss key issues related to tobacco policy in Indiana and Gov. Mitch Daniel's proposal to increase the cigarette tax. Contact information is listed for each faculty member below.

Factors in Indiana's high smoking rate
Top three ways to prevent kids from smoking
Smoking can lead to blindness
Tobacco outspends public health 44 to one in Indiana
Messages matter in youth smoking decisions
How tobacco covers its assets

Hoosiers won't quit … smoking cigarettes. Here's why. Indiana has kept the welcome mat out for tobacco, and it is costing the state over $2 billion annually -- an average of $560 per year to every taxpaying household, said Eric Wright, director of health policy in the Center for Urban Policy and the Environment at Indiana University-Purdue University Indianapolis. Indiana ranks No. 2 among the 50 states for percentage of adults who smoke and may be poised to take the lead. Below, Wright explains some of the state-level factors that contribute to high smoking rates in the state.

• $7.50 -- a fair tax on cigarettes. $7.50 -- that is the tax per pack that would be needed to cover the health costs Indiana incurs for every pack of cigarettes smoked in the state, Wright said. Instead, the tax in Indiana is only 55.5 cents, well below the national average of $1 and ranking 35th among the states. "Raising the tax would bring the rate of smoking down," Wright said. "We did some econometric modeling, and we can predict that if the tax is raised 50 cents, in one year it will lead 34,000 adults in Indiana to quit smoking, it will prevent 48,000 young people from taking up smoking, and it will prevent 23,000 premature deaths caused by smoking." A greater increase in taxation would lead to proportionally greater declines in smoking and smoking-related deaths, he said.
• Powerful special interests. "The tobacco lobby in the state is very strong," Wright said. "The legislature has responded with a laissez-faire approach. The general explanation has been protecting individual rights by not subjecting tobacco to state regulation." The influence of tobacco companies in the legislature means that measures that promote cessation, such as smoke-free workplace ordinances and taxes, are often rejected.
• It's the economy, stupid. "Smoking is tied to economic development," Wright said. "In general, people who are economically better off and better educated tend to smoke less. Smoking can be a way of coping with the stresses that come with poverty. When you are struggling economically, small pleasures can be really important to you." Wright said that attention to job creation and education are crucial in long-term efforts to improve Hoosier health.

Wright can be reached by phone at (317) 274-8589 or (317) 261-3031 or by e-mail at ewright@iupui.edu.

Top three ways to prevent kids from smoking. Guess which strategy is more effective in preventing kids from smoking -- education or taxes? The surprising answer is that taxes are much more effective than educational campaigns in deterring underage smokers, said Stephen J. Jay, professor of medicine and public health at the Indiana University School of Medicine. Nearly all smokers start before legal age, he said, and informing kids about the health risks of smoking is an important goal. However, the most effective strategies for prevention are policy changes that affect the pervasiveness and availability of tobacco products.

• No. 1 -- Price increase. "Increasing the price is the single most effective strategy for decreasing tobacco use among young people. It has been shown in study after study," Jay said. "The effect is elastic. Each time you increase the price by 10 percent, you can predictably decrease the use rate in adults by four percent and in teens by seven percent." He added that a tax increase in Indiana will lead to a drop in youth smoking in the state. "If you get the price up there with a substantial increase in the excise tax, you can predict with a high degree of certainty that the tobacco-use rate will decrease in Indiana."
• No. 2 -- Smoke-free environments. "Smoke-free ordinances, smoke-free schools and smoke-free campuses effectively 'de-normalize' tobacco. The tobacco industry knows that if they can weave tobacco into the culture, kids will begin smoking because it's just part of the culture. If you want to turn that around, you've got to get it out of the environment in which kids are spending their time. We have found from good research that if kids think that everybody is doing it, they are more likely to take up the habit," Jay said. The home is another important environment to consider, he said -- parental smoking is among the strongest predictors of underage smoking.
• No. 3 -- Crack down online. Indiana has worked hard to prevent local retailers from selling tobacco products to minors, but internet sales are largely unregulated and undermine state efforts to control underage tobacco use, Jay said. "The tobacco industry has pretty much free reign on the internet. In 2005 there were more than 500 Web sites selling tobacco and 15 percent of U.S. sales were by the internet. These sales evade state tobacco taxes. Young people can buy cigarettes at low cost and often without age identification," he said. Some states, such as New York and Connecticut, have passed laws prohibiting internet sales of tobacco, but Jay said that comprehensive legislation is needed to curtail these activities nationwide.

To speak with Jay, call 317-274-3126 or e-mail sjay@iupui.edu.

When the smoke gets in your eyes. Exposure to cigarette smoke is a major risk factor for serious vision problems that can lead to blindness, said Victor Malinovsky, clinical professor in the School of Optometry at Indiana University in Bloomington. For example, regular smokers are twice as likely to develop Type II diabetes, three times as likely to experience age-related macular degeneration, and more than 16 times as likely to suffer ischemic optic neuropathy, a sudden-onset disease that can cause total vision loss in one or both eyes. "Casual smokers and people exposed to second-hand smoke also have greatly increased risk of many eye diseases," Malinovsky said. "There are so many components in cigarette smoke that are toxic -- nicotine, carbon monoxide, tar -- and they alter the nutrients that need to reach the eye; they upset the eye chemistry. An even bigger problem is the damage to blood vessels from smoking. The vessels behind the eye can be compromised, which cuts off the flow of oxygen to the eye." Below, Malinovsky describes a number of diseases affecting vision for which smoking is a leading risk factor. He noted that quitting smoking or reducing exposure dramatically reduces the risk of developing these diseases.

• Macular degeneration. "Age-related macular degeneration is the leading cause of blindness among older adults. The two major risk factors are age and smoking. We currently don't have a good treatment for this disease. It affects central vision so that a blind spot develops right in the front of the field of vision. You may be able to move around, but your livelihood will be affected as well as reading and driving -- most activities of daily life."
• Diabetic retinopathy. "The risk of developing Type II diabetes increases with the amount of smoke exposure. Smokers who develop diabetes also have earlier onset than non-smokers who develop the disease. With diabetic retinopathy, the blood vessels behind the eye become leaky. The tissue around the broken capillaries swells and can distort vision. At the same time, capillaries can't get any oxygen to the back of the eye, so the cells begin to die."
• Cataracts. "People who smoke 20 or more cigarettes per day are more than twice as likely to develop cataracts compared to nonsmokers. The toxic elements in cigarette smoke destroy the antioxidant nutrients that are essential to lens transparency."
• Glaucoma. "Glaucoma is another leading cause of blindness that is correlated to smoking. Glaucoma involves damage to the optic nerve. The blood vessels that supply the optic nerve can be damaged from smoking."
• Thyroid eye disease. "Thyroid eye disease is one of the complications from Graves' Disease, a type of overactive thyroid disorder. Hyperthyroidism is an autoimmune problem and smoking causes further impairment of the immune system. People who have Graves' Disease and smoke are at a fourfold risk of developing eye complications compared to people who don't smoke, and the problems are more severe than for nonsmokers."
• Ischemic optic neuropathy. "Ischemic optic neuropathy is a disease of the optic nerve that comes on very suddenly. You can wake up and your vision is gone, or half your field of vision is gone. What happens is that the blood vessels close suddenly, and the blood supply to the optic nerve is completely cut off. It is a rare disease, but it is 16 times more likely to occur among smokers than nonsmokers, and smokers tend to get it in their early 50s rather than their mid-60s. If you are smoking and you develop this condition in one eye, you know you need to stop, because the other eye is at risk."

Malinovsky can be reached at 812-855-5941 and malinovs@indiana.edu.

Tobacco outspends public health 44 to one in Indiana. For every Indiana dollar allocated to reducing use of cigarettes and smokeless tobacco, the tobacco industry spends $44 counteracting this message, said Stephen J. Jay, professor of medicine and public health at the Indiana University School of Medicine. In 2005, tobacco advertising expenditures in the state were $475 million, a record high. In contrast, the state budget for preventing underage smoking and helping adults to quit was cut to $10.8 million, a 70 percent reduction from 2002. Jay said the prevention budget in Indiana comes from the Master Settlement Agreement of 1998, which allocated $4.5 billion over 20 years to Indiana. However, the state has used only a small fraction of that money for tobacco control programs, while the tobacco industry has stepped up advertising efforts in the state. "What fraction of the Master Settlement dollars is actually going to tobacco control in the U.S.? The answer is about five percent. Meanwhile, tobacco advertising has increased 125 percent after the master tobacco settlement, to $15.4 billion annually or about $42 million per day," Jay said. "Their marketing strategy since the settlement has been to target youth, and particularly, young adults aged 18 to 24." In Indiana, the rate of smoking in that age group went up from 28 percent in 2004 to 39 percent in 2005. "Without meaningful federal regulation of the industry, tobacco companies will continue to find ways to addict young kids and thwart efforts of state public health and tobacco control programs to improve Hoosiers' health and decrease the enormous health costs to our state," he said.

To speak with Jay, call 317-274-3126 or email sjay@iupui.edu.

Messages matter when it comes to youth smoking. Since 1980, the Indiana University Smoking Survey, based in the IU Bloomington Department of Psychological and Brain Sciences, has tracked a group of more than 8,000 people to learn about attitudes and behaviors related to cigarette smoking. One specific area the IU Smoking Survey researchers have investigated is the factors that influence a teenager's decision to start -- or refrain -- from smoking. In a study published earlier this year using data collected from sixth to 12th graders, the IU Smoking Survey identified peers, parents and siblings as important factors in determining smoking onset among teenagers. Peers -- both through their behavior and social influence -- were the most powerful instigators of smoking. In addition, teenagers were more likely to start smoking if their parents smoked and if an older sibling of the same gender smoked. However, controlling for these peer, parent and sibling influences, the researchers found that the more teenagers believe that smoking has negative health consequences, the less likely they are to begin to smoke. For girls, believing that smoking was risky to their health lowered the likelihood of starting to smoke only among those who placed a high value on their health. For boys, however, believing that smoking entailed health risks lowered the likelihood of starting to smoke regardless of the value placed on health.

These findings from the IU Smoking Survey have implications for public health messages aimed toward preventing teenagers from starting to smoke:

• It is worthwhile to continue to educate the public about the dangers of cigarette smoking because believing that smoking cigarettes has negative health consequences appears to stop teenagers from starting to smoke.
• Public health messages directed at girls should promote placing value on health because the results of this study indicate that high value placed on health, especially among girls, is necessary for health risk beliefs to prevent the initiation of smoking.
• Given the finding that older, same-gender siblings have a powerful influence on a teenager's smoking behavior, public health messages might be more effective when delivered boy-to-boy and girl-to-girl.

This research was published in the Journal of Communication in an article titled, "The effects of beliefs about the health consequences of cigarette smoking on smoking onset."

For more information about this study or other research conducted by the IU Smoking Survey, contact Jon Macy, 812-856-0840 and jtmacy@indiana.edu or visit http://www.indiana.edu/~smokesvy/.

How tobacco covers its assets. Diversification, long derided as a poor strategy for most companies seeking to maximize shareholder return, has made good business sense for sin companies needing to shelter their assets from potential litigation or regulation, according to a study of tobacco company activity led by Professor Messod Daniel Beneish of Indiana University's Kelley School of Business. For those companies, parking capital elsewhere in physical assets of less controversial operations can keep it away from litigators and help shore up "political capital" as well, says Beneish, the Sam Frumer Professor of Accounting. In the case of tobacco companies in particular, "diversification reduced the depth of their pockets, made them less attractive targets to politicians and private litigants, and extended tobacco firms' influence to a larger number of regulators," said Beneish, who examined 88 diversifying acquisitions by tobacco companies between 1963 and 1988. Diversification usually doesn't make sense for companies, because diversified firms frequently trade at a discount, for example. But it allows tobacco companies such as Phillip Morris to acquire businesses like Kraft Foods as a way to funnel tobacco cash flows into businesses that litigants and politicians would be less likely to attack. "The notion of building political capital is a motivation for diversification that's never been studied," added Beneish, a longtime smoker. "That is, diversification increases the number of legislative districts in which firms have operations, and thus firms' ability to influence a greater number of politicians. As well, diversification increases the number of employees -- and ostensibly the number of unions representing these employees -- making it more difficult for politicians to expropriate because a larger number of jobs, and thus votes, are at stake. This is, to my knowledge, the first economic study to show that diversification actually can create value."

Full text of the paper is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=908623. Beneish can be reached at 812-855-2628 or dbeneish@indiana.edu.

For assistance with these tips, contact Elisabeth Andrews, ecandrew@indiana.edu and 812-855-2153, or Tracy James, traljame@indiana.edu and 812-855-0084.

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