Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Rationale and Objectives: Cigarette smoking has well known negative impacts on health for smokers, but also for non-smokers who are exposed to second-hand smoke. Public policymakers are interested in determining the cost of such smoke exposure in order to help determine the value of interventions to reduce smoke exposure. The estimation of such cost usually starts with estimating the cost of smoke exposure on health care costs. However, health care costs are only a subset of the potential health related costs of smoking. In this study, we estimate the association between smoke exposure and health outcomes related to the development of human capital. If smoke exposure has a negative impact on human capital development, this may impose a cost to society over the course of the individual's lifetime.

Methodology: We use the 2004 version of the Medical Expenditure Panel Survey (MEPS). The MEPS is a national survey that is representative of the U.S. non-institutionalized population. In addition to information on health care utilization and costs, the MEPS also contains extensive information on health risk factors and health status. The survey has self-reported information on smoking status for all adults aged 18 and over. We use this information to determine if a child has an adult smoker in his household, and as an indicator of smoke exposure. The MEPS also surveys parents on the number of school days missed by their children due to injury or illness. Finally, there is a battery of questions for parents about behavioral problems their child may exhibit. Parents are asked to rate on a scale of 0 (no problem) to 4 (very big problem) if the child has problems with behavior at school, and with his/her schoolwork. We estimate a negative binomial model of missed school days as a function of smoke exposure, controlling for an extensive set of economic, demographic and family structure variables. We estimate ordered logit models for the behavioral questions, using the same set of control variables.

Results: Smoke exposure is associated with a statistically significant increase in missed school days. The incremental effect is 0.49 school days missed (p=0.002) if the child's mother smokes, and 0.52 (p=0.014) if there are multiple adult smokers in the home. Children are also significantly more likely to have behavioral problems at school (p=0.000) and trouble with schoolwork (p=0.000) if the child's mother smokes. Similar results are exhibited when the smoking measure is any smoker or multiple smokers in the household.

Conclusions: The potential costs of smoking extend beyond immediate health care costs. Smoke exposure is strongly associated with missed school days and behavioral problems associated with school. Such issues related to schooling could negatively impact the child's human capital formation, which can impose costs over the lifecycle.