It is a well known fact that cigarette smoking is injurious to health and the main component of cigarette i.e. tobacco had numerous unwanted effects on the human health. Then why does not government just stop the cigarette sales or stop producing tobacco? This is an interesting topic for analyzing the changes it would bring to the economy of a country. Smoking cigarettes is indeed a personal choice for people; however in the long run it has an effect on the economic aspect of the country. This essay brings these aspects upfront. This essay does not answer questions like "Is smoking good/bad?" or "Should I stop smoking?" Rather it is a portrayal of the economic effects of a non-smoking country. It presents a selective, but representative, view of what these effects are like. It identifies the factors that are affected directly/indirectly by tobacco production and cigarette sales and then provides analysis for these. Following is a list of the affected economic factors:
Tobacco industry provides employment for around 1 to 2 million of people. This employment comprises of the "direct employment" in industries directly involved in producing and distributing tobacco products and the "indirect employment" in industries that supply goods and services to those industries. If government decides not to produce tobacco, these employees will lose their jobs. This will increase frictional unemployment 1 for the country in the beginning. It will be great if these people will find new jobs, however considering that they have the skills that are required in tobacco industry but are not in demand in other industries; their unemployment would turn out to be chronic unemployment, resulting in highly dissatisfied people and their unhappy life.
Federal tax collections from cigarette sales rose about 403 percent from 1950 to 2004, while State collections raised nearly twenty fold. This collected...