Smoking is bad for your... pocket

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CigarettemoneyThe adverse health effects of smoking are old news. Michael Lokshin and Zurab Sajaia (on page 18) examine the habit's less obvious effect on your paycheck. The data comes from the Tomsk region in Russia – a country with the fourth highest rate of smoking:

On average, non-smoking men earn more than smokers [$400 vs. $330], respectively, thus enjoying about a 19% unadjusted wage premium over smokers. The wage premium of non-smoking women was quite a bit lower at 6%, which translated into an approximately $15 'bonus'.

There is also the economic cost, which in Tomsk amounts to nearly 2 percent of the region's GDP. The loss is not remedied by revenues from cigarette consumption, where, according to the research, tobacco companies pay only 65 rubles per 1000 cigarettes and 8 percent on the sale price of cigarettes.

Russia aside, as the rest of the world is curbing the habit, private sector insurers ponder the consequences.


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