Newswise — The same high cigarette prices that helped reduce youth smoking rates in recent years have led to increased revenue for the tobacco industry, according to a new study by researchers at the American Legacy Foundation and RTI International.
The study, published in the April issue of Tobacco Control, found that 5.6 million students in grades 8 through 12 smoked about 890 million packs of cigarettes in 1997, generating $737 million in revenue for the tobacco industry. By 2002, the number of youth smokers dropped to 3.6 million who smoked about 540 million packs of cigarettes, but generated $1.2 billion in revenue for cigarette manufacturers, a 32 percent jump that resulted from an increase in the wholesale price of cigarettes.
According to the report, Phillip Morris received 58 percent of that revenue and Lorillard and RJ Reynolds received 18 and 12 percent respectively.
Although higher cigarette prices led to increased revenues for cigarette manufacturers in the short-term, researchers estimate that the decline in smoking rates among high school seniors from 1997 to 2002 will represent a loss of more than $4 billion in future tobacco industry revenues from that single graduating class.
"Our analysis shows that recent declines in youth smoking have the potential to reduce tobacco industry revenue considerably. If the nation's 2010 objective of a 16 percent youth smoking rate is achieved, the net loss to the tobacco industry will be more than $11 billion for the lifecycle of each high school graduating class" said RTI's Matthew Farrelly, Ph.D., co-author of the study.
In other words, every high school senior in 2002 that chose not to smoke will represent a loss of $20,000 in future revenue for the tobacco industry.
The study was funded by The American Legacy Foundation and can be viewed on the Tobacco Control Web site.
About RTI International RTI International, the nation's second largest independent nonprofit research organization, is dedicated to conducting research and development that improves the human condition by turning knowledge into practice. With a staff of more than 2,500 people, RTI offers innovative research and technical services to governments and businesses worldwide in the areas of health and pharmaceuticals, education and training, surveys and statistics, advanced technology, governance, economic and social development, energy, and the environment. RTI maintains nine offices in the United States, five international offices, and one international subsidiary, as well as project offices around the world. For more information, please visit us at http://www.rti.org.
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