Background: Public policies are crucial for smoking prevention and improving health among the population. Despite the positive impact in Spain of the law for smoking prevention in 2006, there is room for further improvement in this area of public policy. The estimate of the mortality cost per pack of cigarretes is a crucial factor in cost-benefit analysis for policies aimed to reducing smoking induced mortality. The aim of this paper is twofold. First, we estimate the Value of Statistical Life (VSL) among Spanish smokers. Secondly, we quantify the mortality cost of smoking.
Methods: We use a hedonic wage model to quantify the marginal value of an increase in the mortality risk in monetary terms. We estimate the model for the Spanish labour market using the European Community Household Data and the Encuesta de Accidentes de Trabajo from the Ministerio de Trabajo e Inmigración.
Results: We estimate a VSL of 3.78 million Euros for Spanish smokers. Using this value, in conjunction with the increase in the mortality risk over the life cycle due to smoking, the private mortality cost of smoking is 78 Euros per pack for men, and 54 Euros per pack for women (in 2000 Euros).
Conclusions: The mortality cost per pack of cigarettes is highly above its market price.