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Cigarette Taxes Can Help Cure Two of Greece’s Ills

Author: Peter R. Orszag, Adjunct Senior Fellow
February 28, 2012
Bloomberg.com

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Among all the trials and tribulations that define Greece these days, one that has received relatively little attention is its sky-high smoking rate. Greece's is the highest in the Organization for Economic Cooperation and Development. Greece is an outlier also in that its smoking rate has risen significantly over the past decade.

The country's fiscal crisis may therefore have a silver lining: It has forced the government to raise tobacco taxes modestly, and this already appears to be reducing smoking rates. Still, much more could be done.

In 2009, a shocking 40 percent of Greeks smoked. That is almost twice the OECD average of 22 percent. In France and Spain, the smoking rate was 26 percent. In the U.S., the rate is half that in Greece. The Greek rate was six percentage points higher than even Russia, the only other developed economy whose rate was more than 30 percent. In Greece, smoking rates exceeded 30 percent even for medical students, a study by Constantine Vardavas and Anthony Kafatos of the University of Crete found.

Perhaps even more troubling is that, in the past decade, the share of adult Greeks who smoke rose by almost 6 percent. Over that period, in the OECD as a whole, smoking prevalence declined by 18 percent. The only other developed country that experienced an increase in smoking was the Czech Republic -- but Greece's rise was larger.

The health effects are predictable. Data from the International Agency for Research on Cancer show an age-adjusted death rate from lung cancer of 48 per 100,000 Greek males. In the U.K., that rate is 33 percent lower. In France and the U.S., it's 20 percent lower than in Greece.

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