Issues related to smoking have always created a hassle, mostly ending with a prescriptive conclusion that “smoking is bad for your health”. In fact, there has been heated debate whether smokers will stop smoking if the price of the cigarette rises. This “suggestion” has come into real life in Korea. Recently, Kim Jae Won, a member of the National Assembly, proposed a resolution which included a 2,000 won rise in the price of cigarettes. Aimed to increase the health-promoting funds and to activate the non-smoking industries, this policy now is expected to bring more boon than bane.
Nevertheless, people and non-governmental organizations in favor of this policy focus on appealing to the public health. They believe that cigarette, a table luxury, is detrimental for health in case of the smokers but also, the peripheral damage it causes to the non-smokers nearby. According to a research conducted by the Ministry of Health and Welfare (MW), one out of three answered that he or she would quit smoking when the price of cigarette increases. Another research conducted by MW suggests that the smoking rate has gradually decreased since 1995. In 1995, the overall smoking rate was 66 percent while in 2012 it has subsided to 48 percent. Non-smokers also believe that the increased cigarette price will pay off in a way that the national tax burden will mitigate. Also, when compared to the rise of other products, the price of cigarette is adjusting to the rise of overall price, not becoming expensive.
Likewise those who are in favor of the rise in cigarette price mainly are in the position of protecting their health and seeking other privileges such as, decreased tax burden. Yet according to a survey conducted by SBS (Seoul Broadcasting System), about 49.9 percent of respondents are believed to show their concern towards the rise of cigarette price. Among the ones who did not favor the increase, 54.5 percent were male. In terms of the age, people in their 40s constituted 56.5 percent. Considering the reality of Korea where one out of four is a smoker, the reason there are more people who object the rise of cigarette price is that even the non-smokers do not think that the increased cigarette price will bring decrease in smoking rate.
In reality, there are several reasons why cigarette prices should be increased or not. Park Jung Nam (12, Sociology) says, “Smoking is already a social issue for the past few years, but it is also becoming personal issues when there are people smoking outside of buildings without any respect towards non-smokers. I believe if cigarette price increases over 100 percent of its original price, definitely smokers would decrease.” On the other hand, still there are contradictive view that counters the expected result of increased cigarette price. Byun Hyun Gi (12, Korean History) says, “When people get used to smoking, they will continue to smoke risking more financial expenditure. Increase of cigarette price may bring reduced smokers in short term, but it will not be an ultimate solution after all.”
The Uncomfortable Reality
The current proposal suggests that increase of cigarette price can be a burden for low income brakets, since approximately 60 percent of total smokers in Korea belong to this class. When the government promotes the rise of cigarette price in order to strengthen the national health promoting law and to decrease the smoking rate, it is low income class that will directly receive financial damage.
That is, the rise in cigarette price will strike a blow to the livelihood of low income members. Most of these people are blue collars or part-timers who receive a lot of stress but do not have much financial room to find diverse leisure to relieve their mental pressure. Hence, they are more likely to rely on smoking, which is relatively economical and convenient way of relieving stress.According to Kim Sung Hak (48, Seoul), an employee at Korea Tobacco & Ginseng Corp (KT&G), there is a misconception about the true cost of smoking. Commonly, the cost of smoking is known as the price of a pack of cigarette. The truth is that the cost of the act of smoking has to include the medical fee when a person suffers from various types of diseases resulted from too much smoking. Kim says, “In Korea, when a person suffers from an illness, health insurance covers half of the medical fee. That means that if only one person is ill, then the rest of the citizens have to equally burden half of the medical fee. This is the reason why external cost has to be largely included in the total cost of smoking. Simply, non-smokers are actually opening their wallet because of the patients who are suffering from too much smoking.”
When considering the “price of cigarette pack” and “joy of smoking” as the cost and utility of cigarette, smoking is definitely a reasonable consumption behavior. Kim continues, “When putting all the actual social cost of cigarette, the more people smoke, the more they are burdening each other. Moreover, the act of smoking eventually burdens the society as a whole, making it into an extremely irrational consumption behavior. This is why cigarette should be classified as ‘Bads’, not ‘Goods,’"
Korean male continues to be one the heaviest smokers in the world. An average of 61.8 percent of Korean men smoke these days. In such condition, it is understandable that the government is required to intervene with the economy in order to reduce smoking rate. Due to its addictive nature, smoking is hard to quit even though it imposes tremendous threat to health. Also, the negative aspect of smoking disperses throughout the society and moreover causes income-reversing. This means that the rise of cigarette will mostly harm the low income people, whose stress relieving behavior is smoking.
So as to reduce the overall smoking rate, specific efforts are made throughout the world. On the other hand, because smoking is already firmly rooted as social phenomenon, it is hard to eradicate. Kim states, “The most preferable method is to encourage smokers to quit smoking voluntarily. To aim for a lower smoking rate, there are warning signs on cigarettes, anti-smoking campaign, and anti-smoking education. Regulations prohibit teenagers from purchasing cigarette and designate places where smoking is prohibited. WHO (World Health Organization) activated the ‘Cigarette Regulation Treaty’, therefore enforcing the anti-smoking efforts.”
In fact, the increase in cigarette price may not directly lead to reducing smoking rate, but it may encourage people to quit smoking in terms of economic principles. The price elasticity of cigarette is about -0.6. This theoretical evidence tells that if the price of cigarette doubles, then 60 percent of its consumption would be most likely to reduce. Therefore, the value of increasing cigarette price is quite plausible. Relating to such economic benefit from increased cigarette price, Korea seems to walk a long pathway. Even though Korea performs strict regulations toward the act of smoking, cigarette price in Korea relatively very low. Except North America and other developing countries, Korea’s cigarette price is at the lowest level. The famous “Dunhill” costs 8,000 won in England, while it only costs 2,000 won in Korea. Hence, the increase of cigarette price would encourage Korean economy to generate fully.
The most important part is not about the increase of price itself. Yet, it is the question of “how” will the collected excess budget be used. The implication of increased cigarette price depends on whether the excess budget is used to promote health conditions of smokers and non-smokers, or to meet other needs for national project. As it almost seems clear that the increase of cigarette price is now confirmed, the focus must move on to its usage.
