Smoking in the UK - economic analysis of its costs.

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Smoking in UK

Name: Hans

ID NO.:GZ-11-0033

Group: Keynes

Word count: 1318

Date: Dec.19th


1.        Introduction        

1.1 Background        

1.2 Definition        

1.2.1 External benefit        

1.2.2 External cost        

1.3 Theory        

1.4 Aims        

2. Finding        

2.1 External benefit of smoking        

2.2 External cost of smoking        

2.21 Secondhand smoking        

2.3 The policy of UK Government        

2.31 The ban of advertising        

2.32 The prohibiting in public place        

3. Discussions        

3.1 Taxation        


4. Conclusion        

4.1 Summary        

4.2 Recommendation        

5. Reference        

  1.  Introduction

1.1 Background

United Kingdom was the original state of smoking prevalence and smoking has caused widespread death of the first countries. According to ASH (2011) “there are about 10 million adults who smoke cigarettes in Great Britain” which is “about a sixth of the total UK population”. Throughout the United Kingdom, there was about one-third per cent of all the middle age’s deaths caused by smoking. Therefore, United Kingdom is one of the most importance states of tobacco control. Government control on cigarette consumption through different instruments such as advertising-all advertising and promotion of tobacco are banned in the UK; taxation-taxation is probably the most effective means of reducing tobacco consumption. Raising tobacco prices through taxation can result in significant benefits to the economy. For instance, a 5% price increase would result in 190,000 fewer smokers and increase government revenue by £520 million per year in the first five years.

As can be seen in figure 1, the numbers show that between 1991 and 2001 the retail price of cigarettes increased by about 80% in real terms. This is explained to a large extent by tax increases; over the same period the proportion of tax in the retail price rose from 73% to 80%.

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1.2 Definition

1.2.1 External benefit

        External benefit is the benefit to the third party who is not involved into the activity which causes the cost (Anderton, 2008:96)

1.2.2 External cost

External cost is the cost to the third party who is not involved into the activity which causes the cost (Anderton, 2008:96)

1.3 Theory

This topic exist the relationship between demand and price which is if price increases, the quantity demanded becomes lower. Furthermore, taxation is a factor of the increase and decrease of demand and supply. Besides, advertising also is an important factor to influence the demand of ...

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