If an Indiana where no production, distribution or sale of tobacco existed, 175,000 more jobs would be available to college graduates and other state residents, a Ball State University researcher says.
A study by Patrick Barkey, director of economic and policy studies, suggests that a tobacco-free Indiana would bring more businesses and people to the state, generating higher personal incomes.
For his study, Barkey created a hypothetical world representing the economy of Indiana without tobacco. There would be no tobacco-related disease and no early deaths from smoking.
In this world, the rest of the country would remain unchanged despite the changes in Indiana.
"I basically created a population of never-smokers," he said.
Barkey's study addresses three major areas related to tobacco use and the economy:
-the tobacco industry, including farming, processing, distribution, advertising and taxes
-health care, including tobacco-related disease, smokers' mortality and second-hand smoke
-productivity and investment, including health care cost and changes in excise tax income
Mickey Maurer, president of the Indiana Economic Development Corporation, said the health of Indiana residents is more important than the money that would be lost in excise taxes and other financial gains Indiana receives from tobacco.
According to the United Health Foundation's report on the prevalence of smoking state-by-state, 24.8 percent of Indiana's population uses tobacco products regularly, which is down from 26.1 percent in 2004. The national average for 2005 was 20.8 percent. Indiana is in the top ten states that have the highest percentage of tobacco use.
Maurer said as a result of this, Indiana has a higher rate of cancer and emphysema, which creates higher health care costs than in other states.
If tobacco use were eliminated from Indiana, health care costs would be lower and insurance rates for businesses would go down, making Indiana more attractive to new businesses, he said.
"There would be so much more industry to replace what's lost that there would be a net gain," Maurer said.
These new businesses would create new jobs for college graduates, he said.
Unlike most studies on tobacco, Barkey said his study didn't take into consideration an individual's personal decision to smoke. Instead, the study deals with the effects of tobacco on Indiana's economy.
"Our overall finding is that tobacco use in Indiana exacts a painful, significant cost to the overall economy," Barkey said in the study.
The study takes into account the money that would be lost in tobacco farming, excise taxes and other financial gains of tobacco, but it still reports an overall economic gain.
When tobacco is removed from the economy, the money that would have been spent on tobacco or tobacco-related expenses is redistributed to other goods and services, which generates a larger demand for Indiana-made goods. Because tobacco products are produced largely outside of Indiana, tobacco users aren't spending money on Indiana goods. Without tobacco to spend money on, Indiana residents would potentially buy more Indiana goods, Barkey said.
"When tobacco demand is eliminated from the economy, consumers have money available for other goods and services," Barkey stated in his study.
Barkey's study also suggests that non-smoking employees would work better for a longer period of time.
"A tobacco-free population is larger, older, and works longer," he said in the study. "Smokers' premature deaths occur when they're at the highest part of their earnings."
Because of this, the study reported that personal income would be $28.7 billion higher if tobacco were removed from Indiana. Barkey said that though the study shows a tobacco-free Indiana would be much better off economically, it is a purely hypothetical situation. But that doesn't mean the findings aren't important, he said.
"The continued use and enjoyment of tobacco by Indiana residents is an impediment to economic growth, and thus is a legitimate issue to address in our public policy," Barkey said in the study.
When tobacco is removed from the economy, the money that would have been spent on tobacco-related expenses is redistributed to other goods and services, which generates a larger demand for Indiana-made goods. Because tobacco products are produced largely outside of Indiana, tobacco users aren't spending money on Indiana goods. Without tobacco to spend money on, Indiana residents would potentially buy more Indiana goods, Barkey said.
"When tobacco demand is eliminated from the economy, consumers have money available for other goods and services," Barkey stated in his study.
Barkey's study also suggests that non-smoking employees work better for a longer period of time.
"A tobacco-free population is larger, older, and works longer," he said in the study.
The study reported that personal income would be $28.7 billion higher if tobacco were removed from Indiana. Barkey said that though the study shows a tobacco-free Indiana would be much better off economically, it is a purely hypothetical situation. But that doesn't mean the findings aren't important, he said.
"The continued use and enjoyment of tobacco by Indiana residents is an impediment to economic growth, and thus is a legitimate issue to address in our public policy," Barkey said in the study.
Delaware County Commissioner Tom Bennington said he had no speculations on how a county-wide smoking ban would effect the economy. The commissioners plan to make a decision on the proposed bans within six weeks, he said.
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