Trust and Spin

Thirty years ago, in 1992, Economic professors Robert Tollison and Richard Wagner wrote The Economics of Smoking. They argued that because “people” thought that smoking was more dangerous than it actually was, it meant that there was no market (the system of private supply and demand) failure. Thus, people didn’t need to be warned about cigarettes or to have them regulated. They were right about the perception but maybe the policy prescription is wrong.

People, meaning all people, don’t die from cigarettes. In fact, one of three smokers don’t die from smoking. The public health question isn’t what most people believe—it is what the individuals, i.e., 11.5% of Americans who smoke them believe—that matters. From a smoker’s perspective, 2 out of 3 dying is an extremely high risk. In the regulatory world, for example, we talk about risks of 1 in a million or 1 in 10 million.

Read the full piece on my Substack here.