Quit Smoking, Save a Grand?

Nov. 16, 2008— -- Most smokers already know that they can help preserve their health, hygiene and personal relationships by kicking the habit, and that holds true across the country.

But in strictly financial terms, smokers in Delaware stand to save the most cash by quitting. That's because in Delaware, where a pack of cigarettes costs about $5.39, residents smoke more than in any other state--just over 185 packs per year. That comes out to $998.23 spent individually on smoking every year.

Click here to learn more about saving money by quitting smoking at our partner site, Forbes.com.

On the other hand, so few cigarettes are smoked in Utah that the average resident would save less by stopping smoking than a smoker in any other state. For the 33 average packs they smoke a year, Utahns spend $150.85 annually.

Smokers in most states stand to save between $200 and $500. They include those in Florida ($276.04); Alaska ($441.72); Maine ($439.92); Mississippi ($321.46); and Illinois ($298.66).

Forbes.com found data on the price of cigarettes and frequency of smoking for the 50 states and the District of Columbia, and found that in most states, quitting smoking would save more than $300 per year just on the cost of cigarettes, and in some states, far more than that. Those savings don't include the myriad other costs nonsmokers are spared: steep dry-cleaning bills, big health care costs and higher life insurance premiums among them.

This is especially important today. With scores of Americans being forced to tighten their belts, smoking is a quick way to fatten the wallet. What's more, state cigarette taxes could be on the rise. If history offers any lessons, we may see an even steeper cost of smoking soon--and more of a reason to quit--since state governments often turn to these tax hikes when economic times are tough.

Behind the Numbers

Using data from the Centers for Disease Control and Prevention (CDC) and the Campaign for Tobacco-free Kids, Forbes.com compiled the state taxes on a pack of cigarettes and the average price of a pack in each state. We then used the per-capita packs bought in 2007, as calculated by the CDC, to approximate how much the average smoker spends per year on cigarettes.

A pack of cigarettes in New York is more expensive than anywhere else in the country, at $8.66 (in New York City, cigarette taxes are higher, bringing the price up to $9.72). Yet in New York, only 34 packs are sold annually per capita, bringing tobacco spending to $296--still an attractive savings.

The cheapest pack of cigarettes can be found in tobacco-rich South Carolina, where a $.07 cigarette tax brings the price of a pack to only $3.33. But that doesn't mean individuals in the state spend less on smoking overall. In fact, because 91 packs a year are sold per person in South Carolina, residents spend $304 per year on smokes--more than highly taxed New Yorkers.

Taxes on cigarettes have a direct effect on smoking rates, and New York's prohibitive cigarette costs are a big part of why New Yorkers buy fewer packs.

"Raising the cigarette tax is the simplest, fastest way to reduce smoking," says Eric Lindbloom, director for policy research at the Campaign for Tobacco-free Kids. "There's an immediate response. People cut back more, they quit more, they call quit lines and buy nicotine-replacement therapy more. Every indicator shows that as the price increases you end up with fewer people smoking."

Extra Expenses

But the price of cigarettes themselves isn't the only cost of smoking. Delaware--which sells the most cigarettes per capita out of any state--also spends $284 million on smoking-related health costs per year, and smoking-caused productivity losses cost the state $304 million per year. It's even harder to calculate costs like carpet cleaning, lost home value and even missed job opportunities--some employers now won't hire smokers.

Even though most smokers know the proven health risks and long-term costs of smoking, it often takes a hike in the price of a pack to bring home the negative consequences of the habit.

Terry Pechacek, associate director for science at the CDC's Office for Smoking and Health, says that the immediacy of higher smoking costs often pushes people toward breaking the chains of addiction.

"It places a convenience cost," says Pechacek. "When you have changes in social norms, and then a price increase that you notice each time you buy a pack of cigarettes, it's a very persistent and inescapable cost that's been building on other factors. It's kind of that tipping point that brings all those other behavioral costs together."

What's more, there's a good chance smokers may be spending more on their habits.

"States pass their cigarette tax increases during budgetary crises because they need money and it's a good way to get it," says Lindbloom. "The wonderful advantage is not only do they get money, but they lower state costs and reduce smoking. It's also very popular, unlike other tax increases that make people scream."

But the CDC's Pechacek warns that while taxing smokers is effective for governments and cuts smoking rates, states must go further than taxation.

"Taxes have gone up dramatically over the last four to five years, but the level of service funding for tobacco control programs, quit lines and coverage for medication have gone up very little or not at all," he says.

He adds that, ironically, downturns are among the hardest times for many to quit.

"Smoking is one of the stress-reducing crutches," he says. "During these economic times of stress, we need to help lower-income smokers quit because they may smoke as much or more."