Archives For harm reduction

Fritz L. Laux is a Professor of Economics at Northeastern State University in Tahlequah, Oklahoma.

The puzzling lack of economic impacts

One focus in the analysis of smoke-free air (SFA) laws has been on measuring the impact smoking bans have on the restaurant and hospitality industries. The overwhelming or “consensus” result of this research is that bans impose no adverse impact on industry revenues and employment levels (Scollo et al., 2003; Scollo and Lal, 2008; Hahn, 2010; CDC Fact Sheet, 2014).

What’s puzzling about this literature is that the “no-statistical-significance” result is presented as a neutral or, “this takes the issue off the table” result. I would suggest that the robustness of this finding should be presented as “shocking” and highly significant (if not “statistically significant”).

The economic model for the behavior of profit-maximizing firms would indicate that any restaurant or hospitality venue that could benefit from a smoking ban would already have implemented such a ban. Thus, the imposition of smoking bans should never help and should always hurt such industries. While our model predicts that bans can never help restaurants and can only hurt them, our finding shows that bans tend to have no impact, and may slightly help the average restaurant. This should be viewed, if not highlighted, as surprising.  

Clearly, we understand why the result might be presented with the “no adverse economic impact” headline. Restaurant and hospitality industry groups are important constituencies that can influence policy, and estimates of the business impacts of SFA laws can motivate or placate policy activists. If the laws have, on average, no adverse impact on the members of a local restaurant association, then that restaurant association should have no incentive to oppose SFA ordinances.

My suggestion, however, is that we should give more attention to the strangeness of this result and to the investigation of how this result can be occurring. Where is the market failure that prevented more restaurateurs from implementing SFA policies of their own accord, without need for SFA ordinances? Can efforts to bring more publicity to these market failures help restaurateurs and the public better to understand why SFA policies can make good policy?

Sources of market failure

The obvious (if not tautological) explanation for this weird result is that restaurateurs have somehow been consistently misestimating the business impact of SFA. There are several possible reasons for why this would happen and the most likely of these, it seems, is that social norms play a role in defining how restaurant employees and customers respond to a ban (Leibenstein, 1950). Before imposition of a ban, if the norm is to allow for smoking, then politeness dictates that we will expect restaurants to allow smoking. After a ban (and the resulting change in norms), just as nobody expects to smoke at a fitness club, smoking customers experience reduced desire or expectation of smoking in restaurants. Thus, if the ban changes the norm in ways that restaurateurs do not anticipate, we see empirical results such that industry impact is positive or zero instead of negative.

Borland (2006) with coauthors from the International Tobacco Control project provide evidence of just this kind of an effect. In a survey of current smokers, they found that for those U.S. smokers reporting that they lived in jurisdictions where restaurant smoking was not banned, only 17.5% supported bans on restaurant smoking. For smokers who reported total bans on restaurant smoking in their jurisdictions, 65.5% supported bans on restaurant smoking. Not surprisingly, it seems that expectations and preferences are affected by changes in norms.

With over three-fourths of the U.S. population now living in jurisdictions covered by 100% smoke-free restaurant laws, such shifts in norms within the U.S. are well underway. However, in communities where restaurant smoking is still commonly accepted, complaining to a restaurant manager about another customer’s smoking might seem a bit strange and confrontational. In these situations, patrons and employees may also not be as aware of the health consequences of secondhand smoke. After the publicity of a smoke-free air ordinance heightens awareness and after having experienced eating in a smoke-free restaurants, the value patrons place on smoke-free air may go up. Similarly, restaurant employee may acquire increased preferences for work in smoke-free establishments (Tang et al., 2004).

Although this argument seems less convincing (given the large percentages of restaurants that did go smoke-free well in advance of SFA law implementation), another possible explanation for how restaurateurs could have so consistently misestimated the business impact of smoke-free air policies is that they may have been influenced by incorrect or biased information. From the 1980s through the early 2000s, restaurant managers would have received lots of communication from various state and national industry associations arguing either that smoking restrictions would hurt business or that improved ventilation, rather than going smoke free, would be the correct industry response. As can be seen in online archives of tobacco industry documents, the Tobacco Institute was actively working with hospitality industry associations to promote such an “accommodation strategy” (via improved ventilation and smoking sections) for restaurants during these years when most smoke-free air legislation was passed (Dearlove et al., 2002). This industry-funded analysis, as intended, did likely have some influence the decisions made by restaurateurs.

Implications

From those who oppose SFA laws, the primary argument has been that, if bans do not hurt the restaurant and hospitality industries, why do they need to be imposed on these industries? Would not any restaurants and bars that could benefit from smoking bans have already implemented such bans of their own accords? My suggestion is that, in any advocacy for SFA, it may be appropriate to try to answer these objections more directly. Using research like the Borland et al. (2006) article, we can suggest why it is that restaurateurs, who would benefit from SFA implementation, don’t implement SFA policies of their own accords. Then, after having offered theoretical explanations, we can present our empirical analyses of the economic impact on the restaurant and hospitality industries with more credibility. The idea is that, just as good empirical work gives credence to theory, intuitive theoretical explanations give credence to empirical results.

In January a Food and Drug Administration advisory panel, the Tobacco Products Scientific Advisory Committee (TPSAC), voted 8-1 that the weight of scientific evidence shows that switching from cigarettes to an innovative, non-combustible tobacco product such as Philip Morris International’s (PMI’s) IQOS system significantly reduces a user’s exposure to harmful or potentially harmful chemicals.

This finding should encourage the FDA to allow manufacturers to market smoke-free products as safer alternatives to cigarettes. But, perhaps predictably, the panel’s vote has incited a regulatory furor among certain politicians.

Last month, several United States senators, including Richard Blumenthal, Dick Durbin, and Elizabeth Warren, sent a letter to FDA Commissioner Scott Gottlieb urging the agency to

avoid rushing through new products, such as IQOS, … without requiring strong evidence that any such product will reduce the risk of disease, result in a large number of smokers quitting, and not increase youth tobacco use.

At the TPSAC meeting, nine members answered five multi-part questions about proposed marketing claims for the device. Taken as a whole, the panel’s votes indicate considerable agreement that non-combustible tobacco products like IQOS should, in fact, allay the senators’ concerns. And a closer look at the results reveals a much more nuanced outcome than either the letter or much of the media coverage has suggested.

“Reduce the risk of disease”: Despite the finding that IQOS reduces exposure to harmful chemicals, the panel nominally rejected a claim that it would reduce the risk of tobacco-related diseases. The panel’s objection, however, centered on the claim’s wording that IQOS “can reduce” risk, rather than “may reduce” risk. And, in the panel’s closest poll, it rejected by just a single vote the claim that “switching completely to IQOS presents less risk of harm than continuing to smoke cigarettes.”

“Result in large number of smokers quitting”: The panel unanimously concluded that PMI demonstrated a “low” likelihood that former smokers would re-initiate tobacco use with the IQOS system. The only options were “low,” “medium,” and “high.” This doesn’t mean it will necessarily help non-users quit in the first place, of course, but for smokers who do switch, it means the device helps them stay away from cigarettes.

“Not increase youth tobacco use”: A majority of the voting panel members agreed that PMI demonstrated a “low” likelihood that youth “never smokers” would become established IQOS users.

By definition, the long-term health benefits of innovative new products like IQOS are uncertain. But the cost of waiting for perfect information may be substantial.

It’s worth noting that the American Cancer Society recently shifted its position on electronic cigarettes, recommending that individuals who do not quit smoking

should be encouraged to switch to the least harmful form of tobacco product possible; switching to the exclusive use of e-cigarettes is preferable to continuing to smoke combustible products.

Dr. Nancy Rigotti agrees. A professor of medicine at Harvard and Director of the Tobacco Research and Treatment Center at Massachusetts General Hospital, Dr. Rigotti is a prominent tobacco-cessation researcher and the author of a February 2018 National Academies of Science, Engineering, and Medicine Report that examined over 800 peer-reviewed scientific studies on the health effects of e-cigarettes. As she has said:

The field of tobacco control recognizes cessation is the goal, but if the patient can’t quit then I think we should look at harm reduction.

About her recent research, Dr. Rigotti noted:

I think the major takeaway is that although there’s a lot we don’t know, and although they have some health risks, [e-cigarettes] are clearly better than cigarettes….

Unlike the senators pushing the FDA to prohibit sales of non-combustible tobacco products, experts recognize that there is enormous value in these products: the reduction of imminent harm relative to the alternative.

Such harm-reduction strategies are commonplace, even when the benefits aren’t perfectly quantifiable. Bike helmet use is encouraged (or mandated) to reduce the risk and harm associated with bicycling. Schools distribute condoms to reduce teen pregnancy and sexually transmitted diseases. Local jurisdictions offer needle exchange programs to reduce the spread of AIDS and other infectious diseases; some offer supervised injection facilities to reduce the risk of overdose. Methadone and Suboxone are less-addictive opioids used to treat opioid use disorder.

In each of these instances, it is understood that the underlying, harmful behaviors will continue. But it is also understood that the welfare benefits from reducing the harmful effects of such behavior outweigh any gain that might be had from futile prohibition efforts.

By the same token — and seemingly missed by the senators urging an FDA ban on non-combustible tobacco technologies — constraints placed on healthier alternatives induce people, on the margin, to stick with the less-healthy option. Thus, many countries that have adopted age restrictions on their needle exchange programs and supervised injection facilities have seen predictably higher rates of infection and overdose among substance-using youth.

Under the Food, Drug & Cosmetic Act, in order to market “safer” tobacco products manufacturers must demonstrate that they would (1) significantly reduce harm and the risk of tobacco-related disease to individual tobacco users, and (2) benefit the health of the population as a whole. In addition, the Act limits the labeling and advertising claims that manufacturers can make on their products’ behalf.

These may be well-intentioned restraints, but overly strict interpretation of the rules can do far more harm than good.

In 2015, for example, the TPSAC expressed concerns about consumer confusion in an application to market “snus” (a smokeless tobacco product placed between the lip and gum) as a safer alternative to cigarettes. The manufacturer sought to replace the statement on snus packaging, “WARNING: This product is not a safe alternative to cigarettes,” with one reading, “WARNING: No tobacco product is safe, but this product presents substantially lower risks to health than cigarettes.”

The FDA denied the request, stating that the amended warning label “asserts a substantial reduction in risks, which may not accurately convey the risks of [snus] to consumers” — even though it agreed that snus “substantially reduce the risks of some, but not all, tobacco-related diseases.”

But under this line of reasoning, virtually no amount of net health benefits would merit approval of marketing language designed to encourage the use of less-harmful products as long as any risk remains. And yet consumers who refrain from using snus after reading the stronger warning might instead — and wrongly — view cigarettes as equally healthy (or healthier), precisely because of the warning. That can’t be sound policy if the aim is actually to reduce harm overall.

To be sure, there is a place for government to try to ensure accuracy in marketing based on health claims. But it is impossible for regulators to fine-tune marketing materials to convey the full range of truly relevant information for all consumers. And pressuring the FDA to limit the sale and marketing of smoke-free products as safer alternatives to cigarettes — in the face of scientific evidence that they would likely achieve significant harm-reduction goals — could do far more harm than good.