Negative Externality of Tobacco Industry Essay


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Negative Externality of Tobacco Industry


Negative externalities are something that exists when the production or consumption of a good brings damaging or risky effect to a third party. Loud music, any kind of pollution such as air, water, soil or light, congestion, or building a new road, are examples of negative externalities. Production of cigarettes has a lot of negative externality that must be discussed. Cigarettes are demerit good, which consumers can be provided from markets easily. The consumption of cigarettes is too harmful and detrimental to society because they cause a negative externality.

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Because the consumption of that product has a negative effect on third parties, and anyone or anything cannot change the impairing consequences of it. In studies, it is shown that 12% fewer children were taken to the hospital after the first year since smoking in public areas was prohibited. This study shows the large-scale externality of smoking in the world because the externality arises when the production or consumption of a product affects other people ("Advertising Externalities," n.d.). Smoking does not only pollute the world; it also harms people's health in both the long and short term. Many diseases happen because of the effects of cigarettes. On the other hand, the World Health Organization estimated that the consumption of cigarettes causes a loss of 500 billion dollars in economic damage every year. The people who smoke cigarettes do not become aware of this consequence of their bad habit. Still, the economy shows how harmful cigarettes are both for the consumer and the others around them. The solutions for the damage to the economy are making cigarettes illegal or making people aware of the negative externalities of their consumption. But both are seen almost impossible to achieve because most smokers actually know the damages of their habit both for themselves and the world.

Another negative externality of smoking, which should be explained, is taxes. Everyone pays taxes, and it goes to taking care of smokers' health management. They cause their own health problems by smoking, and the others who not smoke should not pay for that. It is not fair paying for smokers' health care for people who work hard and long hours to defray their needs. The government also implemented some policies to reduce smoking and its negative externalities. For instance, the Public Health Cigarette Smoking Act of 1969 required package warning labels such as "smoking is dangerous to your health," banned cigarette advertising on media, and so on (“Policy and Legislation,” 2020). Also, the Government’s Tobacco Control Plan wants to lower the number of 15-year olds who regularly smoke from 8% to 3% or less. Also, smoking in all enclosed workplaces is banned in 26 states such as Alaska, California, Hawaii, Minnesota, and so on. The government does many things to reduce the consumption of cigarettes, but these laws and regulations only limit that, not end that (“List of Smoking Bans,” 2020). Everything depends on the smokers because limitations do not erase that habit; they need a determination to end it. Smokers need support to quit that habit, something that makes them realize that it is killing them, and most importantly, it is killing the world.


In conclusion, negative externalities of the cigarette are too much to count. It destroys the people, environment, economy, and many other things, and the most effective solution for that is keeping away from that. Even the government works to reduce its harms, and almost everything depends on the smokers. The consumption of cigarettes must be stopped for the sake of the world.


Advertising Externalities- Cigarettes. (n.d.). Accessed on

List of smoking bans in the United States. (2020, March 13). Accessed on Wikipedia.

Policy and Legislation. (2020, February 18). Accessed on

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