The  Costs  and  Benefits of Smoking  Restrictions

                An  Assessment  of  the
       Smoke-Free Environment Act  of  1993
                       (H.R. 3434)
                    Prepared at the request of:

                  Congressman Henry Waxman
       Chairman, Subcommittee on Health and The Environment
               Committee on Energy and Commerce
                  U.S. House of Representatives
                      Indoor Air Division 6607J
                   Office of Radiation and Indoor Air
                  U.S. Environmental Protection Agency
                        401 M Street, SW
                       Washington, DC 20460

                          April 1994

-------
The Costs and Benefits of Smoking Restrictions

             An Assessment of the
     Smoke-Free Environment Act of 1993
                  (H.R. 3434)
                   Prepared by:

               David H. Mudarri Ph.D
               Indoor Air Division 6607]
           Office of Radiation and Indoor Air
          U.S. Environmental Protection Agency
                 401 M Street, SW
                Washington, DC 20460

                    April 1994

-------
             The Costs and Benefits of Smoking Restrictions

                         An Assessment of the
                  Smoke-Free Environment Act of 1993
                              (H.R. 3434)
                         TABLE OF CONTENTS



EXECUTIVE SUMMARY	ES-1

IN FRODUCTION	1

GENERAL METHODOLOGY	2

ASSESSMENT OF COSTS AND BENEFITS OF SMOKING RESTRICTIONS
IN A SOCIETY WITH NO SMOKING RESTRICTIONS	4

     Section 1.   Cost of Implementing Smoking Restrictions	4

     Section 2.   Benefits from Reduced Exposure to Environmental
                Tobacco Smoke (ETS)	8

     Section 3.   Savings in Operating and Maintenance Expenses	13

     Section 4.   Increased Productivity and Decreased Absenteeism
                Resulting from Smoking Restrictions	14

     Section 5.   Savings to Smoking-Related Fires	16

     Section 6.   Impacts of Smoking Restrictions on Smokers	16

COSTS AND BENEFITS OF H.R. 3434 BASED ON CURRENT CONDITIONS	24

REFERENCES	R-l

EXHIBITS

•MTFIN'DIX A Review of Selected Literature

AITENDIX B Technical Appendix

-------
                  The Costs and Benefits of Smoking Restrictions

                               An Assessment of the
                       Smoke-Free Environment Act  of 1993
                                     (H.R. 3434)

                               Executive Summary
Introduction
      In August 1993, H.R. 3434, the Smoke-Free Environment Act of 1993, was introduced in
the House of Representatives by Congressman Henry Waxman (Chairman of the Subcommittee
on Health and the Environment of the Committee on Energy and Commerce) with more than 40
co-sponsors. This Bill would require that all nonresidential buildings regularly entered by 10 or
more persons in the course of a week adopt a policy that bans smoking inside the building or
restricts it to separately ventilated and exhausted smoking rooms. The Bill would allow
enforcement actions in the United States District Courts by an individual, government, or other
aggrieved entity, with allowable fines of up to $5,000 per day.

      H.R. 3434 would effectively ban or restrict smoking in most indoor environments. As
written, these environments would include such diverse establishments as office buildings,
schools and other educational establishments, theaters, restaurants, hotels, hospitals and other
health care facilities, sports arenas, retail establishments, and manufacturing plants.

      In a recent letter to Carol Browner, Administrator of the United States Environmental
Protection Agency (EPA), Congressman Waxman requested that EPA analyze (quantitatively
where possible) the compliance costs and the health and economic benefits of H.R. 3434.
Specifically, he asked  that EPA assess the cost of compliance including provisions for smoking
lounges; the value of benefits resulting from reduced exposure to environmental tobacco smoke
and changes in smoking behavior; the value of increased productivity and reduced absenteeism;
savings from reduced operation and maintenance costs; and savings in fire related injuries and
property damage.

      Role and Limits of Cost-Benefit Analysis

      In principle, cost-benefit analysis can be a useful tool for helping to identify  those
government actions which leave society as a whole better off. It can contribute to such
assessments by providing a systematic framework for measuring and comparing the net
economic benefits of policy alternatives. Cost-benefit analysis does not by itself, however,
provide definitive answers regarding the merits of public health and environmental policy
alternatives Rather, net benefit estimates must be combined with other information, and
weighed with other policy considerations, to formulate effective public policy.  Pursuant to  this,
and consistent with Executive Order 12866, EPA routinely weighs the full range of relevant
policy considerations, such as distributional effects, legal issues, and institutional issues in
making regulatory decisions. In keeping with this approach, EPA presents the current analysis,
which the Agency believes provides useful insights regarding many of the potential  costs and
benefits of H R. 3434.
April 20, 1994                             ES-1

-------
       Summary Results

       This analysis indicates that passage of H.R. 3434, or similar restrictions, could achieve
net benefits (i.e., benefits minus costs) ranging from $39 to $72 billion per year, excluding some
potentially significant costs and benefits to smokers. For various reasons these and other
potentially significant effects of H.R. 3434 could not be characterized in terms of economic
value.  Major costs reflected in these estimates include the costs of compliance and enforcement.
Major benefits include those associated with reduced exposure to environmental tobacco smoke
(ETS) and reduced operating and maintenance expenses. Benefits are also achieved from
reduced absenteeism and reduced smoking-related fires, but these are not significant relative to
other benefits. The net effect is that estimated benefits exceed estimated costs by $39 billion to
$72 billion.

       As noted above, the current analysis leaves open the question of whether smokers
themselves gain or lose due to H.R. 3434. Clearly, smoking restrictions impose a burden on
smokers. The losses in terms of time and inconvenience associated with forcing smokers to shift
the location and/or timing of their cigarette consumption, and the potential burden associated
with quitting, may be substantial.  However, these losses would be offset to some unknown
extent by the benefits of improved health among smokers who quit, cut back, or fail to start
smoking in the first place. The net economic valuation of these and other costs and benefits of
smoking to smokers themselves is beyond the scope of this analysis for reasons discussed in
more detail below.

       Nevertheless, it is important to emphasize that this analysis found that, of those effects
which could be quantified, the estimated benefits exceeded the estimated costs by $39 billion to
$72 billion. In order to reach a finding that H.R. 3434 would impose a net economic loss to
society, the net effect of all unquantified costs and benefits - including some important costs
and benefits to smokers themselves - would have to be additional costs of at least $39 billion
per year.

       Document Review

       While EPA makes no commitment to revise and reissue the present study, this document
has been developed and submitted to Congress in a form intended for review by outside
experts, interested parties, and the public.

       The principal author of the study is Dr. David H. Mudarri, an economist in the Indoor
Air Division of EPA's Office of Air and Radiation. This version of the study reflects extensive
review by other EPA offices] the Office of Management and Budget, the Council of Economic
Advisors, and the Department of Health and Human Services. In addition, a previous version
of this report was reviewed by several economists in the public and private sectors.

General Methodology

       Assessing Annual Costs and Benefit

       This analysis assesses the costs and benefits that would occur each year into the future
for present and future generations. All estimates are represented as annual costs or benefits.
That is, all costs are converted to an annual equivalent that would occur every year into  the
future based on 1990 population characteristics.  Varying time streams of costs or benefits are
April 20, 1994                             ES-2

-------
converted to equivalent annual values using a 3% social discount rate. Sensitivity analyses
using 5% and 7% discount rates are also provided.

       Throughout this analysis it is assumed that H.R. 3434 would apply to all the previously
stated buildings, at all times, without exception.  It is also assumed that full compliance would
be achieved within the first year of implementation.

       Choice of  Baseline for Assessing Costs and Benefits

       Per capita cigarette consumption has been steadily falling over the past several years.  In
addition, recent survey data suggest that many establishments already have some form of
smoking policy, and the percent of establishments which report having such policies has been
increasing in the past few years (DHHS, 1992; BNA 1991). Therefore, it was necessary to
establish a baseline from  which to measure the effects of H.R. 3434 from enactment forward.
This was accomplished by- a three step procedure.

       In the first step, the net costs and benefits are computed assuming current cigarette
consumption levels, and assuming that there are currently no restrictions. This is an artificial
baseline used for analytic convenience, but may be interpreted as a reflection of the cost and
benefit differences in a society with and  without smoking restrictions comparable to H.R. 3434.

       Second, survey data were examined concerning the prevalence of smoking policies
already in place, and using assumptions about the nature of those policies as well as policies in
small establishments not  covered in those surveys, an estimate was derived that 23% of the
population is covered by  smoking restrictions comparable to the requirements of H.R. 3434.
Current cigarette consumption levels, and 23% coverage by existing policies are therefore used
as the baseline for this study.  As a result, this study concludes that 23% of the previously
calculated cost and benefits are attributable to existing policies, and 77% are attributable to
H.R. 3434, or other future restriction policies, including private initiatives.1

       Finally, sensitivity analyses to the baseline assumptions are conducted by calculating the
changes to the costs and benefits that would result from alternative assumptions about future
trends. The specific variables tested include future trends in cigarette consumption, and future
trends in the development of public and  private smoking restriction policies which could take
place in the absence of national legislation.  These alternative scenarios of potential future
trends are intended to demonstrate how the absolute levels of incremental costs and benefits
attributable to H.R. 3434 are sensitive to assumptions about the future prevalence of smoking
restrictions enacted by other public and private entities, and to future trends in cigarette
consumption.

       Other Economic Impacts

       Economic considerations which legislators may wish to consider go beyond just costs
and benefits assessed in this analysis. Where information from this analysis sheds light on some
of these considerations, they are briefly described.
       1 As this report was being prepared, the President signed into law the Coals 2000. Educate America Act. Thus
legislation restricts smoking in all federally funded primary and secondary schools and in day care centers. Because a
sensitivity analysis is presented of the alternative baseline assumptions, no specific adjustments to account for this
ne\\ law were made to the 23% baseline calculations used to assess the effect of H R 3434.


April 20, 199-3                              ES-3

-------
Summary Comparison of Costs and Benefits

       Exhibit ES-1 summarizes the estimated costs and benefits of implementing national
legislation such as H.R. 3434, using a baseline estimate that 23% of the population is already
subject to such restrictions. The following sections provide additional detail on these results.

       Costs of Implementing Smoking Restrictions

       Policy Implementation

        In implementing the restrictions of H.R. 3434, establishments would incur the costs of
establishing a policy, communicating the policy to employees or clientele, posting signs, assuring
compliance, and possibly offering smoking cessation services.  The current study estimates that
these activities would cost between $0.2 billion and $0.5 billion per year.

       Smoking Lounges

       The main determinant of cost is the expenditure associated with the construction and
maintenance of smoking lounges. Smoking lounges meeting the requirements of H.R. 3434 would
be required to meet stringent standards concerning ventilation and other provisions to insure
that the air in the lounge does not enter other parts of the building. In addition, smoking
policies involving smoking lounges are generally associated with greater complaints and with
lower reported satisfaction than smoking bans, and smoking bans are becoming increasingly
popular (Sorensen. et al.  1991; 1991a, 1992; Stillman. etal. 1991). Finally, the structural
features of many existing buildings make it infeasible or cost prohibitive to construct a smoking
lounge which would meet the requirements of H.R. 3434. While the extent to which smoking
lounges will be relied upon to comply with this legislation is uncertain, this analysis is based on
the assumption that, for the reasons mentioned above, only 10% to 20% of establishments
would opt for smoking lounges. For the 10% to 20% of establishments which opt to build
smoking lounges, the cost of those lounges is estimated to be between $0.3 billion (10% lounges)
and $0.7 billion (20% lounges) per year.

       The current analysis estimates that the total cost of implementation by the public and
private sector, including the cost of smoking lounges, would be approximately $0.5 billion per
year (10% smoking lounge) to $1.4 billion per year (20% smoking lounge).2

       Enforcement Costs

       The cost to building owners for ensuring compliance in their buildings is included as part
of the cost of establishing and maintaining a policy.  With respect to enforcement,  H.R. 3434
provides no specific requirements for enforcement of its provisions, other than through citizen
suits in federal court. Therefore, enforcement costs are difficult to quantify. However, in a
proposed rule concerning the sale or distribution of tobacco products to individuals under 18
years of age, the Department of Health and Human Services3 estimated that sting-type
       2 Includes a higher cost per lounge.


       3 Department of Health and Human Services, Substance Abuse and Mental Health Administration, 45 CFR
Part 96, Substance Abuse Prevention and Treatment Block Grants. Sale or Distribution of Tobacco Products to
Individuals Under 18 Years of Age Proposed Rule.


April 20, 1994                             ES-4

-------
operations used by state governments would cost between $0.1 billion and $0.2 billion per year.
Recognizing that these two issues are not strictly comparable, an estimate of between $0.1
billion and $0.5 billion per year appears plausible for a society with no current restrictions, and
is used in this analysis. This would translate into an estimated enforcement cost of between
$0.1 billion and $0.4 billion per year under current baseline (23% coverage) conditions. Some
expenditures by the Federal government and by state and local governments can be expected for
information dissemination, though they may well be less than the value of current resources
devoted to passing controversial state and local legislation.4  These expenditures were not
quantified.

The Effects of Reduced ETS Exposure

       The Health Consequences of ETS

       A major component of the benefits that could be achieved from national legislation that
restricts smoking in public places is from reduced exposure of building occupants to ETS.

       Exhibits ES-2a and ES-2b present information on the  health consequences of ETS. For
the purpose of valuing the benefits resulting from reduced exposure to ETS due to smoking
restrictions, several conservative adjustments to these figures were made.  First, all deaths and
illnesses associated with maternal smoking were excluded because the primary route of
exposure is not expected to be through ETS in public buildings.5 Therefore, the deaths
associated with spontaneous abortions, sudden infant death syndrome, respiratory conditions
in newboms, and short gestation/low birth weight newborns were also excluded, as were the
morbidity consequences of low birth weight and neonatal intensive care.

       The second conservative adjustment relates to heart disease. The American Heart
Association estimates that between 35,000 and 40,000 heart disease deaths occur every year
because of ETS (Taylor, 1992).  This is based on studies in which estimates of the effect of ETS
on heart disease fall in the range of 32,000 to 40,000 deaths per year as presented in Exhibit
ES-2a. Because these estimates are substantial, and because EPA did not formally assess  heart
disease risks in its ETS risk assessment (EPA, 1992), two conservative adjustments to these
figures were made.

       •   First, the low end of the range (32,000) was used as the  high estimate, and this was
       reduced by 50% (16,000) to obtain the low estimate.
       4 Even when smoking restrictions are passed at the state or local level, campaigns to nullify the legislation or
to preempt local legislation with weaker state legislation can involve the expenditure of significant resources on both
sides of the issue No attempt was made to quantify current costs to state and local entities, though national legislation
would be expected to reduce many of these costs For an excellent analysis of this issue as it is manifested in California,
sec Macdonald and Clantz (1994)


       5 While the primary route of exposure is maternal smoking, it is estimated that smoking restrictions
comparable to H R 3434 would reduce the size of the smoking population because some smokers would quit, and some
future smokers would refrain from initiating the habit In addition, it is estimated that the rate of consumption of
remaining smokers would be reduced To the extent that these changes in behavior will affect maternal smoking, some
reductions in these excluded effects would also bkely occur, resulting in benefits The current study did not, however,
quantify these potential benefits in our calculations.


April 20, 1994                               ES-5

-------
        •   Second, an arbitrary additional conservative adjustment factor of 75% to this range
        was applied, resulting in a base estimate of 12,000 to 24,000 heart disease deaths per
        year.6

        The same proportional breakdown between home (27%) and nonhome (73%) exposure
related deaths that was reported by EPA for lung cancers also applied here. Therefore, 3,240
to 6,480 heart disease deaths per year are estimated for home exposures, and 8,760 to 17,520
heart disease deaths per year are assumed to be associated with exposure outside the home.

        The Value of Benefits from Reduced ETS Exposures

        The reduction in exposure resulting from smoking restrictions will result in avoiding an
estimated annual average of 7,000 to 12,900 premature deaths over the first 50 years, and
approximately 7,500 to 13,000 annually thereafter.7 The value of these reductions, when using
a "willingness to pay" measure8, and discounting future reductions at a rate of 3%, would range
between $33 billion and $60 billion  per year.9

        To this has been added benefits to be achieved from improved health, mostly to
children,  including reduced incidence of lower respiratory tract infections, ear infections, and
asthma. These benefits are estimated at between $2 billion and $5 billion per year, most of
which is associated with reduced asthma induction among children.  For asthma, this analysis
reflects an estimated reduction of between 1,200 and 3,000 cases annually.  To value the
       6 Some adjustment may be appropriate also because there appears to have been an increase in the survival
rate of heart disease patients over the past several years due to advances in medical technology.


       7 The 7,500 to 13,000 annual premature deaths avoided is achieved gradually over a period of about 20
years. It is based on the assumption that the gradual reduction in mortality risk from reduced ETS exposure would
follow the same time pattern as the reduction in mortality risk for smokers who quit smoking. Available data suggests
that the reduction of lung cancer mortality risks for smokers who quit is gradually reduced over a 20 year perioa
(DHHS, 1989). The decrease in mortality risk for heart disease is known to occur much more quickly (e.g. Taylor,
1992). Therefore, this analysis assumed that the decrease in mortality risk for heart disease takes place twice as
quickly as for lung cancer.


       8 Willingness to pay measures in this case reflect the value that persons assign to reducing their risk of
premature death The willingness to pay measure used for reduced exposures to ETS is $4 8 million per premature
death avoided. See Appendix A-l for a discussion of this estimate.

       Where possible, willingness to pay measures as opposed to medical cost savings and savings in lost earnings
are used as the value of avoiding premature death.  Using medical costs and lost earnings alone would represent an
incomplete measure of the economic value individuals and society assign to avoiding mortal risk. For example, using
only medical costs and lost earnings would imply that social well being is improved when individuals die just after
retirement—before medical costs are high and just after salary income ceases.


       9 It is estimated that smoking restrictions would induce 3% to 6% of current smokers to quit, and would
decrease by 5% to 10% the number of persons who each year become regular smokers The smokers who quit would
eventually die of old age, so this effect would be transitory. In addition, it would take about 50 years for the
reduction in smoking initiation rates to fully reduce the smoking population by 5% to 10%.

        It is estimated that smoking restrictions would reduce, by 10% to 15%,  the number of cigarettes smoked by
the remaining smokers in a 24 hour period It has been suggested that some smokers may increase their consumption at
home in order to make up for lost consumption  outside thenome. No attempt was made to account for this possible
effect on ETS exposures because this does not appear to be the general case, and because the estimate of reduced
consumption is a net reduction over the full day


April 20, 1994                                ES-6

-------
benefits from reduced asthma induction, a willingness to pay measure associated with chronic
bronchitis,10 which is also a chronic respiratory disease was used.

       The total benefit from reduced ETS exposure includes both the benefits of premature
deaths avoided plus the benefits of reduced illness. The total benefits due to reduced ETS
exposure is thus estimated to be $35 billion to $66 billion per year.

       Increased Comfort of Building Occupants

       This analysis assumes that, all else being equal, no building occupant would prefer being
exposed to environmental tobacco smoke, and that most derive benefits from a smoke free
environment. With the exception of the health, productivity, and safety effects discussed
elsewhere, these benefits are largely intangible, and include such factors as reduced irritation
and reduced environmental odor, and less annoyance with tobacco smoke residuals left on hair
and clothing. These effects are more bothersome to some than others, but may be of
considerable importance to some persons.11  In the present study, no attempt was made to
quantify these benefits.  However, because the overall results do not include the benefits of
increased comfort, and because of the pervasive use of conservative assumptions in this
analysis, it is expected that the estimate of total benefits from reduced ETS exposure is
conservative.

       Savings in the Operation and Maintenance of Buildings

       Smoking in a building involves implicit operational and maintenance expenses. In
addition to emptying and cleaning ashtrays, the smoke, ashes, and accidental burns on furniture
and carpets create an additional housekeeping and general maintenance burden. For example,
the Building Owners and Managers Association (BOMA) International reports that in a tightly
monitored program, a member firm experienced a 15% reduction in housekeeping costs when a
non-smoking policy was introduced. Maintenance costs were not covered in the monitoring
program. Changes that were observed included elimination of the need to empty or clean
ashtrays; reduction in high surface dusting and the dusting of desks and tabletops; reduced
detailed vacuuming around desks of smokers; and reductions in the cleaning of Venetian blinds
and heating, ventilation, and air conditioning (HVAC ) vents.  In addition, cleaning personnel
found that they spent less time moving articles on desks in order to remove ashes.  BOMA
cautions that this  was a tightly monitored program, and that actual experience may only
produce an average of 10 % in overall cleaning costs.12 Maintenance cost savings include less
frequent replacement of furniture, reduced cost of carpet repair, savings in the repair of
computer equipment operated by smokers, and sometimes less frequent  painting.

       The actual savings in both housekeeping and maintenance expenses are expected to vary
from building to building depending upon use (e.g., offices versus retail  stores).  A separate
estimate was therefore developed for different uses- offices, mercantile and services (retail),
food service, health care, assembly, education, lodging, and warehouse/industry.  The cost
       10 Based on willingness to pay measure for reducing the incidence of chronic bronchitis (Neumann, etal.
1994), the estimated value ol avoiding chronic asthma is assumed to be SI .5 million per case.


       11 See for example letters to the editor in the Journal of the Medical Association of Georgia, Vol 79, March
1990, page 273


       12 Personal correspondence from James Dinegar, BOMA International to David Mudarri, EPA. January 1994


Ap-il 20, 1994                             ES-7

-------
saving estimates were then allocated just to the portions of those buildings for which they
would apply.13

       Finally, it was recognized that the computed savings would not be realized in many
buildings for several reasons.  First, some buildings already have partial smoking restrictions,
even though they do not comply with the requirements of H.R. 3434, so that these buildings
would have already experienced some savings from smoking restrictions. Second, it was
recognized that buildings for which permanent housekeeping and maintenance personnel are
fixed may not experience savings in the short term. Using survey data to indicate proportions of
establishments that experience maintenance savings, the square feet to which savings would
apply was decreased by about 40% in most cases.

       For maintenance expenses, the high estimate is distinguished from the low estimate
primarily by the inclusion of items for which there was considerable uncertainty. Reduced
computer repair costs are applied only to the high estimate for offices. Savings in the
replacement of furniture are applied only to the high estimate for offices, health care and
educational facilities, and to the high and low estimates for lodging and food service
establishments Carpet repair savings are included in the high estimate for offices and health
care, and in the high and low estimates for lodging and food service establishments.

       Taking these factors into account, this analysis estimates that the operation and
maintenance savings would amount to about $4 billion to $8 billion per year.14

       Effects on Productivity

       On-the-Job Productivity Improvements from Reduced ETS

       It is generally agreed that exposure to ETS reduces the productivity of "individual"
building occupants, probably more for nonsmokers than smokers, though no reliable basis for
quantifying this effect could be found. It is also likely that clearly defined and implemented
smoking  policies will increase "organizational" productivity by reducing potential conflicts
between smokers and nonsmokers.  Evidence suggests that well-run smoking restrictions are
popular among both employees and management, and that when they are well managed and
tailored to the  social norms  of individual worksites, they are effective (Andrews,!983; Hocking.
et al 1991, Hudzinski, 1990; Peterson,  et al. 1988; Sorensen.  et al. 1986; Sorensen. et al. 1991;
Stave, et al 1991) Nevertheless, no basis for quantifying effects on organizational productivity
could be found

       Losses  I'M Productivity from Restrictions to Smokers.

       While reduced ETS exposure would likely have some positive impact on smoker's
productivity, the inability to smoke at their work stations would likely have the opposite effect.
This could occur for two reasons. First, depending on their level of addiction, some smokers
who want to smoke, but are restricted, may become  uncomfortable, and less able to work
       13 For example, university classrooms do not generally allow smoking anyway, so that a smoking restriction
would result in savings only in the office spaces or other common areas in classroom buildings


       14 The housekeeping and maintenance cost savings, when compared to the cost of implementing smoking
restrictions, including smoking lounges, suggest that some building owners may be induced to consider implementing
smoking restriction? in order to increase profits, even in the absence of smoking restriction legislation.
AT-.! 20, 1994                             ES-8

-------
effectively. Second, in order to smoke, smokers would have to leave the work station and go
either to a designated smoking lounge or outside to smoke.  The resulting effect on productivity
would be limited because taking occasional breaks is already a normal part of the workday for
most persons. Thus, while it is likely that some decrement in productivity would result from
these two effects, it is not likely to be large relative to the productivity gains from reduced ETS
exposure, and it would be difficult to quantify.

      Net Effect on Productivity

      There are both positive and negative influences on productivity. The ETS effect would
increase productivity and apply to all employees. However, some smokers would work less
effectively and some would spend more time going to and from an allowable smoking area.
This may decrease productivity, but would apply only to smokers, and only to some portion of
the smoking population. Quantitative estimates of these effects could not be developed for this
study.

      Benefits from Reduced Absenteeism

      In addition to considerations of on-the-job productivity, smoking restrictions would
yield productivity gains by reducing absenteeism.  After accounting for differences in
socioeconomic characteristics between smokers and persons who have never smoked, smokers
are estimated to have about 50% more workdays lost than persons who have never smoked,
and former smokers are estimated to have about 30% more workdays lost than never smokers
(Manning, et al. 1991).

      There is a plausible presumption that an institutional environment that restricts smoking
and that supports abstinence will reduce cigarette consumption among smokers, increase
attempts to quit and quitting success rates, and reduce the rates at which nonsmokers take up
smoking. However, in 1989, the Surgeon General found that evidence of the effect of smoking
restrictions on actual smoking behavior was considered to be inconclusive (DHHS, 1989). Since
that time, a number of studies appear to support the conclusion that such restrictions have
some of the postulated effects on smoking behavior (see Appendix A).

       Based on a review of these recent studies, it is estimated  that between 3% and 6% of
current smokers would quit as a result of national legislation that restricts smoking. This would
result in an immediate decrease in the number of smokers and an equivalent increase in former
smokers  We also estimate that the initiation rate for new smokers would decrease by 5% to
10%. This would ultimately result in an equivalent proportional reduction in the number of
smokers, and an equivalent absolute increase in the number of persons who have never smoked.
However, the effect of the reduced initiation rate would occur gradually  over a 50 to 60 year
period. The average daily earnings including fringe benefits of smokers is about $104, and
discounting all future effects by 3% yields an estimated savings of under $0.5 billion per year.
This is quite insignificant when compared with other effects.

      Savings in Smoking-Related Fires

      Most smoking-related fire injuries and property losses are in residential environments,
which would not be subject to smoking restrictions.  For example, between 1988 and 1990, there
was an annual average of some 1,328 smoking  related fire fatalities in residences compared to
an annual average of 38 fatalities in nonresidential buildings (Miller, 1993). Likewise, property
damage due to smoking-related fires over the same period averaged some $316 million annually


April 20, 1994                            ES-9

-------
for residences, compared to $115 million annually in nonresidential buildings (Miller, 1993). As
a result, the savings from smoking restrictions would be minimal, and is estimated to be
approximately $0.5 to $0.7 billion per year. This estimate includes the effect of an estimated
reduction in cigarette consumption at home because of quitting and reduced initiation.

Benefits or Losses Regarding Smokers

       Smoking restrictions comparable to those in H.R. 3434 would be expected to result in
some reduction in overall cigarette consumption. Faced with restrictions on where they may
smoke, some current smokers may quit and some may reduce overall consumption.  In addition,
these restrictions would also tend to discourage many nonsmokers, mostly teenagers,15 from
becoming smokers.

       These changes in behavior would result in significant improvements to the health of
smokers themselves, as well as other benefits such as increased safety and reduced property
damage from smoking-related fires.  Based on the assumptions used in this analysis, EPA
estimates changes in smoking behavior would result in an average of 27,000 to 54,000 fewer
premature deaths per year among smokers during the first 50 years, and 47,000 to 92,000 fewer
premature deaths per year thereafter.16  On average, smokers who quit or cut back would add
back an average of 5 to 8 years of life otherwise lost to smoking-related premature death.  For
those nonsmokers who avoid becoming smokers, life is extended by an average of about 15
years.17

       Clearly, these health benefits to smokers are highly significant, and, as a matter of public
policy, may be viewed as a benefit to society. However, there remain 45 million smokers who
purchase approximately 25 million packs of cigarettes per year, and about 1 million persons
become regular smokers annually. Since persons smoke despite the risks and costs, one would
presume that, provided these persons are rational, fully knowledgeable, and are able to
accurately assess the consequences of smoking, including potential addiction, the benefits of
smoking to them outweigh the risks and the costs.  However, for a number of reasons, this study
does not attempt to estimate the economic value of the benefits or losses regarding smokers.

       First, the economic measures traditionally applied to the health consequences of
pollution may not be appropriate to use in estimating the economic value of physical effects of
smoking that occur to smokers themselves. Exposure to pollution, such as ETS, is essentially
involuntary and uncompensated. Addiction arguments aside, smoking is a voluntary activity
that results in other consequences for smokers, some positive and some negative.  These other
consequences are not reflected in measures of value for health risk reductions  sometimes used
by EPA  Applying such health risk valuation factors to health consequences for smokers would
       15 CDC (1991)


       16 The difference in death rates each year results from the different time patterns of the effects of quitting and
cutting back on consumption, and because the analysis assumed that it would take 60 years reduced annual initiation
to complete its affect on the size of the smoking population. Therefore, the 54,000 to 92,000 premature deaths reflect
annualratcs after 60 years for reduced initiation, in addition, this analysis assumed H.R 3434 would have only a
"one time" effect on decisions to quit, rather than an ongoing effect. Therefore, the H.R. 3434-related quitting
eventually disappears as the cohort of smokers motivated to quit by H.R. 3434 dies from old age or other causes.


       17 See Exhibit 6-8 of the main text.


A:?:-!' 20. 1994                             ES-10

-------
therefore inappropriately omit the value of all these other costs and benefits to smokers,
resulting in potentially biased measures of the welfare change to society.

       Second, analysts disagree whether the traditional economic models one might use to
measure the welfare change to smokers can be reasonably applied, particularly given limits on
available data. To obtain reasonable estimates of the change in net benefits to smokers, these
traditional models require that the subjects ~ smokers in this case - are acting rationally in
response to a free and open marketplace. Furthermore, these consumption decisions must either
be devoid of significant price distortions such as taxes and subsidies, or analytical corrections
must be made to take account of these distortions.  With respect to the rationality requirement,
questions have been raised whether the rational consumer choice model applies given the
apparent addictive nature of smoking, or to the delicate question of smoking initiation by
teenagers.18 Questions have also been raised whether the consequences of taxes (e.g., cigarette
tax) and subsidies (e.g., tobacco farm subsidies, subsidized health care) significantly distort
consumer decision-making in this case.

       Third, EPA is concerned that currently available data are insufficient to support using a
traditional economic model to estimate the change in net benefit to smokers caused by H.R.
3434. The reason for this is H.R. 3434 does not prohibit smoking outright, nor does it change
the purchase price or quantity of cigarettes available. Instead, H.R. 3434 only compels changes
in the location and/or time pattern of cigarette consumption. This would be expressed in
economic terms as an increase in the transaction cost of smoking, and the transaction cost
would vary widely among smokers. Since it is unclear how the slope of the demand curve for
cigarettes might shift in response to a nonuniform increase in transaction costs to smokers, a
reliable measure of the change in net benefits to smokers cannot be decided.

       Based on the foregoing, this study makes no attempt at this time to quantify the
economic value of the consequences of H.R. 3434 to smokers themselves.

Comparing Costs and Benefits

       While several elements of costs and benefits were not quantified, and bearing in mind
the limitations presented by the current analysis, two principal findings emerge.  First, it is clear
that the benefits of smoking restrictions comparable to H.R. 3434 substantially outweigh the
costs for those items quantified in our analysis. Second, comparing the high estimate of costs
with the low estimate of benefits does not change the fundamental conclusions that benefits
significantly exceed costs.

        It should be noted  that no attempt was made in the current analysis to evaluate the
costs and benefits of altering provisions of the legislation. Throughout the analysis, no
exception in scope or timing of the provisions of H.R. 3434 were assumed. Clearly, changing
provisions such as the scope or timing of the restrictions would affect both costs and benefits.
       18 Note, however, that some analysts subscribe to models of "rational addiction" which have been developed
and empmcallv tested (Becker and Murphy,1988),(Chaloupka,1991). However, these models do not take account of
those who underestimate the strength of the addiction, or, who, for whatever reason, fail to appreciate the magnitude
of the adverse consequences

       Nor do the models appropriately confront the difficult question of the consequences from teenage smoking
These models demonstrate that teenagers tend to disregard the future consequences of smoking more so than do adults
(Chaloupka, 1991) Reducing teenage smoking is generally regarded as a benefit, and legislation in most States
prohibits the sale of tobacco products to teenagers.


Apnl 20, 1994                              ES-11

-------
       Comparisons with Alternative Baselines

        Given the rapid increase in public and private smoking restrictions in the last few
years, it is likely that the future will bring additional restrictions without passage of H.R. 3434.
Of course, the future is always uncertain, and tobacco consumption and smoking restrictions
will be influenced in part by campaigns of tobacco and anti-smoking interests (Samuels and
Glantz, 1991, Macdonald and Glantz, 1994).

       Three different baseline scenarios for the prevalence of present and future public and
private sector smoking restrictions were developed and compared. Each one assumes that
current levels of cigarette consumption are maintained into the future. The first baseline
scenario for smoking restrictions assumes that there are no current restrictions. This is the
artificial baseline used in the main text for analytic convenience. The second scenario assumes
that 23% of the population are currently covered by restrictions comparable to H.R. 3434, and
is the scenario  used to characterize the costs and benefits of H.R. 3434.  The third scenario
assumes that the recent  increase in public and private restrictions would continue reaching a
maximum level in which 75% of the population is covered by smoking restrictions, in 10 years.

       Alternative scenarios were also constructed which varied the assumption about future
baseline consumption of cigarettes, assuming that per capita consumption would continue to
decline for 10 years and 20 years, before levelling off.  Similar to other major influences such as
the national educational campaigns about smoking, national legislation restricting smoking in
public buildings may contribute to continued downward trends in cigarette consumption.
Alternatively, these downward trends may continue or level off regardless of the advent of such
legislation. However, while recognizing that several issues were not quantified in this study,
sensitivity analysis indicates that, as in the case of alternative public  and private restriction
policies, varying the assumed baseline trend of future cigarette consumption has no significant
effect on the result  the benefits would be expected to exceed costs by a substantial margin.

        Results using alternative baseline scenarios are summarized in Exhibit ES-3. The first
scenario presents results under an assumption that there are no restrictions currently in place
and that per capita consumption of cigarettes remains at current levels. This is the base scenario
used to calculate benefits and costs of smoking restrictions. The second scenario differs from
the first in that it assumes that 23% of the population is covered by policies which already
comply with H.R. 3434. This is the baseline we use to assess  the impact of H.R. 3434. The
third scenario assumes that restrictive smoking policies will continue to be adopted in the public
and private sector without the passage of H.R. 3434, and that these will continue and achieve a
level of 75% compliance in 10 years and remain at that level thereafter. The fourth scenario
combines an assumption of. 23% existing compliance with an assumption that per capita
cigarette consumption will continue to fall for ten years into the future at 3% per year, and then
remain constant after that. The last scenario is the same as the fourth except that per capita
cigarette consumption is assumed to fall for 20 years before it levels off.-

       Under all of the alternative scenarios presented in this analysis, assumptions about the
pervasiveness  of future restrictions in the absence of H.R. 3434 have virtually no effect on the
findings that the benefits would exceed the costs.

       A 3% discount rate is used for all scenarios. While the absolute level of estimated costs
and benefits are different under each scenario, our qualitative conclusions remain unchanged.
April 20, 1994                             ES-12

-------
Other Economic Considerations

       The estimates of costs and benefits covered in this analysis are a subset of potential
economic consequences that policy makers may wish to consider.

       Restoration of Lost Income

       Implementing smoking restrictive legislation nationally would result in the restoration of
approximately $31,00019 for each pre-retirement year of premature death which is avoided
because of smokers who quit, cut back, or fail to become smokers because of H.R. 3434. On
average, we estimate that each premature death avoided because of quitting and reduced
consumption would add approximately 1.4 to 4 salary earning years, and each premature
death avoided from persons who refrain from becoming smokers would add approximately 11
salary earning years of  life.20 When future values are discounted at 3%, this analysis estimates
that between $3 billion  and $6 billion of lost income would be restored. A similar estimate was
not possible for persons exposed to ETS, though this effect should be considered. The
importance of this impact is enhanced to the extent that some children, spouses, the elderly or
disabled may be dependent on such income.

       Reduced Burden on the Medical Service Industry

       Every year, the average expenditure for medical services for smokers and former
smokers exceeds that of nonsmokers. However,  this is partially offset by the fact that
nonsmokers live longer, and continue to consume medical services during the extra years of life.
When both of these factors are taken into account, the result is a net excess burden on the
medical service industry of about $35 billion per year due to smoking.2i Assuming that changes
in the excess medical expenditures due to smoking restrictions would be proportional to
changes smoking related premature deaths, this analysis estimates that every reduction in
annual premature death would represent an annual reduction of $85,000 for  medical services.
Accordingly, when future savings are discounted at 3%, H.R. 3434 would reduce annual
expenditures for medical services by $2.3 billion to $4.7 billion per year. It is not clear from our
analysis what net impact reduced exposure to ETS would have on the medical service industry.

       Potential Cost to Social Security and other Pension Funds

       Persons who would otherwise have died prematurely would live longer under smoking
restrictions and collect pensions and social security during those extended years. Each
premature death avoided for smokers who quit, cut back, or fail to initiate smoking represents
an extension of life of about 5 to 7 years beyond the age of 65, during which time they would be
eligible to collect a pension annuity.  Data are not currently available to support a similar
estimate for ETS exposed individuals.
       19 The estimated annual earnings of smokers is inflated by 20% to account for earnings after the age of 65,
based on OTA (1993)


       20 Salary earning years are assumed to be years prior to the age of 65.


       21 This is estimated from information provided by Hodgson (1992) who compares excess medical costs over
the lifetime of persons who have ever smoked , and persons who nave never smoked Similar data and procedures were
also used by Manning etal (1991)
Apr.! 20, 1994                             ES-13

-------
       Reduced Revenues from Cigarette Sales and Excise Taxes

       Implementation of national legislation to restrict smoking in public buildings would
reduce overall cigarette consumption by approximately 11% to 17%, and this impact would
occur within the first few years of implementation. This would result in a corresponding
reduction in cigarette tax revenues.22 However, these could be offset, to some extent, by the
social benefits of alternative agricultural production or other taxable uses of farmland.

       Employment Dislocations

       Reductions in demand for cigarettes and medical services would involve some
temporary dislocations of persons employed in these industries.

Conclusions

       Given data limitations, and the uncertainties inherent in cost-benefit analysis of public
health and environmental policies, this analysis does not purport to provide definitive
conclusions about the overall merits of national smoking restriction legislation.
Nevertheless, while recognizing that several effects of H.R. 3434 including effects.on
productivity, comfort from reduced exposure to ETS, and the net losses or gains regarding
smokers, were not quantified, this analysis demonstrates that, for those items that were
quantified, the estimated benefits of H.R. 3434 exceed the estimated costs by a substantial
amount. This analysis suggests that the net effect of these excluded items would have'to
represent a loss of $39 billion to $72 billion per year for costs to exceed benefits.

       As suggested in Exhibit ES-4, the overall findings of substantial net benefits is not
altered by comparing high costs to low benefits, or by alternative discount rates. Furthermore,
while the magnitude of the net benefits specifically allocated to H.R. 3434 is dependent on one's
assumptions about baseline conditions, these assumptions go more to the question of whether
or not to capture these net benefits through national legislation or by other public and/or
private initiatives.
       22 For an excellent comparison of what smokers pay in excise taxes, medical expenditures, and contribution to
retirement funds, relative to the value of the services they receive for those payments, see Manning etal. (1991).
However, the net monetary payments made by or to smokers is not a usefulindex for measuring the overall social
benefits or costs of smoking restrictions. As previously described, willingness to pay measures are more appropriate.
Also, our costs and benefits do not count transfers of costs or benefits from one group in society to others.


April 20, 199-3                              ES-14

-------
          ES-1: Summary of Costs and Benefits*
         :?1X Reetrlcilens
Cost of Implementing the Legislation
Smoking Bans
Smoking Lounge
National Enforcement
Benefits from Reduced Exposure the ET3
Value of Premature DMlhf Avoided
Home Exposure
NonHoma Exposure
Improved Health'
Increased Occupant Comfort
Savings In Operating and Maintenance Expenses
Housekeeping
Maintenance
Net Change In Productivity
Savings In Reduced Smoker Absenteeism
Savings In Smoking Related Fires
Value of Injuries and Deaths Avoided
Residential
NonReildentlal
Property Damage Avoided
Benefit* Without Regard 10 Smoker* [2]
""3% Discount Rste""
Low Eetlmate High Eitlmate
(Millions of Dollars)
470 1,437
123 350
270 703
77 385
34.084 65.041
S59 2.018
32.229 57.989
2.09S 5.037
f •
3,96* 7.714
2.983 3.386
996 4.327
* *
172 344
469 694
226 452
157 149
86 93
39,023 72,356






""5% Discount Rate""
Low Cellmate High Estimate
(Millions of Dollars)
475 1,451
123 350
275 716
77 385
33,180 61.924
530 1.911
30.555 54.976
2.095 5.037
* > 1
3,969 7,714
2.963 3.386
966 4.327
* *
144 289
469 694
226 452
157 149
86 93
37,287 69,170
•

"7% Discount Rale"
Low Estimate High Estimate
(Millions ol Dollar!)
480 1,464
123 350
280 729
77 385
11,958 59.863
509 1.836
29.351 52.810
2.095 5.037
• f
1.969 7,714
2.983 3.388
986 4.327
* •
128 256
469 894
226 452
157 149
88 93
16,941 66,884
Benefits or Losses Regarding Smokers
    Premature Death* Avoided (Smokere)

             Quit Smoking
             Reduced Consumption
             Reduced  Initiation
              Total

   Benefit Lone* to Smoker*
Annusl Averege e«er
Low (Mtmrt*
4.198
20.178
2.634
27,306
90 Veer Period
HI,* a.n..i.
8.391
39.431
5.869 [3)
53,691
Annuil Bits Al
Low Eetlmate
0
30.582
15.988
48,550
HBJ 90 Yesrs
High Estimate
0
59.788 [1]
31.938 13)
91.703
• • • •
 "Totals may appear to be greater then the sum ol Individual Hems due to rounding
 •  Not quantified   See text for discussion
 1. Most ol this estimate Is due to the estimated value of reduced asthma Induction In children  The high estimate In Exhibit ES-I rs reduced by 50% because
 ol uncertainty of Its magnitude
 2  Considers just  the above coats and benflts
 3   Annual premature deaths avoided after 60 yean  Annual reduction In premature dearths gradually Increases ever the llrat 60 yean before H reaches a
 constant  value

-------
        Exhibit  ES-2H- Estimates  ol  U.S.  Nonsmokar  Annual  Mortality  Associated With
                                Exposure to  Other  People's  Smoke
           MORTALITY



  Lung Cancer (ICO 162-163)

   Home ETS sources

   Other ETS sources


  Other Cancers


  Heart Disease  (410-414)
  Burn Deaths


  Spontaneous Abortions

  Sudden Infant  Death Syndrome

  Respiratory Conditions, newborn
  (769-780)

  Short Gestation. Low  Birthweight
  (765)
 U.S. EPA'.'



3.000 Total

 800

2.200
CENTERS  FOR
   DISEASE
  CONTROL*

   3.8003
                       1,300"
                        700

                       2.000


                        900
     OTHERS



12«. 240 to 2000«

300». 30007. 5000*

4000"


11.000-12.000" 0
                                         32.000-
                                         40.000' '«"
                    120011.
                    145.000"

                    1.90014

                    4.400'«.a


                    4,400'«."
                                                                                                          COMMENTS
ETS a Group A carcinogen
ETS concentrations similar
in smoking homes and
offices   Generally higher
in restaurants


Limited  evidence  lor
cancers other than lung

Evidence continues to
mount on ETS and heart
disease

Due to  fires initiated by
smoking materials
                     Estimates are based on
                     maternal smoking
•EPA1 evaluated only the respiratory hazards of ETS. also, was the only source to breakdown home vs  nonhome nsks
>>Deaths to children under age 18
CEPA< concluded that maternal smoking is a strong risk factor for SIDS  ETS exposure to the newborn  is also considered to be
 a risk factor for SIDS
"Defined by DiFranza as perinatal deaths, which includes  stillborns

References
1       U S  EPA (1992) Respiratory Health Effects of Passive
        Smoking  Lung Cancer and Other Disorders  EPA/600/6-90/006F
2       Centers for Disease Control (1991)   Smoking Attributable
        Mortality and Years of Potential Life Lost - U.S. 1988  MMWR 40 62-71
3       Modified by CDC from National Research  Council (1986)
        Environmental  Tobacco Smoke Measunng Exposures and assessing health effects  Washington, DC  Academy Press
4       Arundel  (1987)
5       Vutuc  (1984)
6       Wigle  (1987)
7       Wells  (1988)
8       Repace and Lowry (1985)
9       Russet et al (1986)
10     Glantz. S and Parmley (1991)  Passive Smoking and Heart
        Disease. Epidemiology, Physiology and Biochemistry   Circulation  83-1-12
11      Steenland, K (1992)  Passive Smoking and the  Risk of Heart
        Disease. JAMA 267 94-99
12     Adapted by CDC from Federal Emergency Management Agency. 1990
13     Miller.  A.L (1993)  The U S  smokmg-material fire problem
        through 1990  The role of lighted tobacco products in fire  National Fire Protection Association. Ouincy. Mass. March 1993
14     DiFranza. J R  (1993)  Tobacco Abuse  Morbidity and
        Mortality in the Pediatnc Population due  to the  Use of Tobacco Products by Other People  Submitted to JAMA

-------
      Exhibit  ES-2b- Estimates  of  ETS-Attrlbutable  Morbidity  In Children  Due  to  Home  and
                               Nonhome  Sources
              MORBIDITY*

Low Birth Weight (i2500g)
Admission to Neonatal Intensive Care Units
Operations on Tonsils or Adenoids
Tympanotomy Operations
Episodes of Otitii Media
Asthma  Exacerbation
Asthma  Induction
Physician Visits for Cough
Lower Respiratory Tract Inlectiops
(Pneumonia. Bronchitis. Bronchiohtis)
Fire-Related  Injuries
                                                                HOME
   US.  EPA'
300.000 • 700.000
 12.000 - 40.0001

135,000 • 270.0001
    DIFranza"
  59,000«>
  25.000" «
  27.000*
  139.000
2.366,000
  536.000'

2.176,000"
885,000 •  1.138.0001

    359*
                                                         NONHOME
   30.000*
    160.000*
  2,800.000*
100.000 - 300.0009
1.000 - 5,0008 n
  3.400.000*
 15.000 - 30.0009'
      •Age <  18 years, unless noted otherwise
      "From maternal smoking during pregnancy
      cDiFranza provides cost estimates of 302 m •  773 m $
      "Age <  15 years
      •As estimated by U S EPA based on results from OiFranza'4
      'Physician visits
      (As estimated by U S EPA based on results from U S EPA'
      "Nonlhreshold model. Z-10
      'Under  18 months of age only
      (Bronchitis in children under 18 years plus pneumonia in children under 5 years
      kFrom all sources of smoking materials

-------
     •"-'•'  r~-3:  Analysis of Alternative  Baselines*
Co*1 of Implementing th* I •glilitlon


 n»n«fit* from Reduced Eip<


">»wlngi In Operating and Mi


Net Oh»ig« In Productivity
Sivlngf In Smoking Reliled FlrM_

              Net Benefit*








Illation
ure the ET3
itenanee Expeneee

btenteelftm
FM

Scenario #1
flow naiellne
No Restriction!
(1990 Clg Com)

[21

610
45,303
5.154
f
223
609

Scenario »?
Current Baseline
23% Restriction!
(1990 Clg Com)

131

470
34,884
3.969
f
172
469
Low E«tlmat»» [1]
Scenario *3
75% Restriction!
In 10 Year*
(1990 Clg. Com.)

|4|
(Millions of Dollars )
209
15.521
1.766
*
77
209

Scenario #4
Current Baseline
23% Reetrlctloni
Contln Con* Decl
10 Y..T1
[51

456
33.864
3,853
*
167
455

Scenario M
Current Bssellne
21% Reetrlctl«n»
Contln Cone Decl.
20 Yeers
[«l

382
28.364
3,227
*
140
381
                                                                               50,679
   39,023
                     17,363
                                        37,883
 'Totals may appear to be greater than the sum ol Individual Items due to rounding.
 1.  All estimates use 3% discount rate, and assume the same enforcement cost ol $100 million.
 ?.  This is the basic scenario used in the main tett.
 3.  The principal estimates in the le»l lor assessing the etlects ot H.R.  3434 are based on this scenario.
 4  Assumes no additional compliance alter 10 years
 5.  Per capita consumption has dedlned by about 3% per year from 1980 to 1990 (DHHS,  1994).  Assumes the rale ol decline wtll continue lor 10
 years, and then level off.
 6  Assumes the rate  of decline In per capita consumption over the past 10 years will continue lor the next 20 years and then level ol<
                                                           31,730
       a  jo
                                       Smoking Restriction*
                                              3c*n>rto •} 79% Reelrtctlone In 10 Yeere
                         Scenerto ft: R»w Rt»»!ln»
                      *—*—*	*—*—*—*--»—*—*—*—*—*—*—*—*—*—•
               1   ?  3   4   '>   6  7   &  9  10  1 1  12  13 14  1 5 16  17 18  18 20

                                               Vet re
                                                                                                o  3500
                                                                                                a
                                                                                                E
                                                                                                jj  3000
" 2000
0

a. 1500
3
£  1000

    soo

      0
                                   Per Capita Consumption ol Cigarette*
                                                                                                                                                              Confnu*d reducVort
                                                                                                                                                                ol
                                                                                   Scenario «'  <2. •)
                                                                                       Scenario 04 Leva*
                                                                                         oft ft 10 y«ara
                                                                                                                                                                              Scenario 05: L*v«.
                                                                                                                                                                               off In 30 y»» •
                                                                                                                                      to    to    r-
                                                                                                                                                                    at   o»   o   o

                                                                                                                                                    Y..r

-------
Exhibit ES-4: Benefits Minus Costs
 Base=23% Restrictions

           Low Estimate

           High Estimate

           Low Benefits Minus High Costs
$ million
3% Disc. Rate 5% Disc, rate 7% Disc. Rate
39.023
72.356
38,056
37.287
69,170
36.311
36,041
66.884
35,057

-------
                The Costs and Benefits of Smoking Restrictions

                              An Assessment of the
                     Smoke-Free Environment Act of 1993
                                    (H.R. 3434)
Introduction
       In August 1993, H.R. 3434, the Smoke-Free Environment Act of 1993, was introduced in
the House of Representatives by Congressman Henry Waxman (Chairman of the Subcommittee
on Health and the Environment of the Committee on Energy and Commerce) with more than 40
co-sponsors. This bill would require that all nonresidential buildings regularly entered by 10 or
more persons in the course of a week adopt a policy that bans smoking inside the building or
restricts it to separately ventilated and exhausted smoking rooms. The bill would allow
enforcement actions in the United States District Courts by an individual, government, or other
aggrieved entity, with allowable fines of up to $5,000 per day.

       H.R. 3434 would effectively ban or restrict smoking in most indoor environments. As
written, these environments would include such diverse establishments as office buildings,
schools and other educational establishments, theaters, restaurants, hotels, hospitals and other
health care facilities, sports arenas, retail establishments, and manufacturing plants.

       In a recent letter to Carol Browner, Administrator of the United States Environmental
Protection Agency (EPA), Congressman Waxman requested that EPA analyze (quantitatively
where possible) the compliance costs and the health and economic benefits of H.R. 3434.
Specifically, he asked that EPA assess the cost of compliance including provisions for smoking
lounges; the value of benefits resulting from reduced  exposure to environmental tobacco smoke
and changes in smoking behavior; the value of increased productivity and reduced absenteeism;
savings from reduced operation and maintenance costs; and savings in fire related injuries and
property damage.

       Role and Limits of Cost-Benefit Analysis

       In principle, cost-benefit analysis can be a useful tool for helping to identify those
government actions which leave society as a whole better off. It can contribute to such
assessments by providing a systematic framework for measuring and comparing the net
economic benefits of policy alternatives. Cost-benefit analysis does not by itself, however,
provide definitive answers regarding the merits of public health and environmental policy
alternatives.  Rather, net benefit estimates must be combined with other information, and
weighed with other policy considerations, to formulate effective public policy. Pursuant to  this,
and consistent with Executive Order 12866, EPA routinely weighs the full range of relevant
policy considerations, such as distributional effects, legal issues, and institutional issues in
making regulatory decisions. In keeping with this approach, EPA presents the current analysis,
which the Agency believes provides useful insights regarding many of the potential costs and
benefits of H.R. 3434.

       Summary Results

       This analysis indicates that passage of H.R. 3434, or similar restrictions, could achieve
net benefits (i e., benefits minus costs) ranging from $39 to $72 billion per year, excluding some
potentially significant costs and benefits to smokers. For various reasons these and other

-------
potentially significant effects of H.R. 3434 could not be characterized in terms of economic
value. Major costs reflected in these estimates include the costs of compliance and enforcement.
Major benefits include those associated with reduced exposure to environmental tobacco smoke
(ETS) and reduced operating and maintenance expenses. Benefits are also achieved from
reduced absenteeism and reduced smoking-related fires, but these are not significant relative to
other benefits. The net effect is that estimated benefits exceed estimated costs by $39 billion to
$72 billion.

      As noted above, the current analysis leaves open the question of whether smokers
themselves gain or lose due to H.R. 3434. Clearly, smoking restrictions impose a burden on
smokers. The losses in terms of time and inconvenience associated with forcing smokers to shift
the location and/or timing of their cigarette consumption, and the potential burden associated
with quitting, may be substantial. However, these losses would be offset to some unknown
extent by the benefits of improved health among smokers who quit, cut back, or fail to start
smoking in the first place. The net economic valuation of these and other costs and benefits of
smoking to smokers themselves is beyond the scope of this analysis for reasons discussed in
more detail below.

      Nevertheless, it is important to emphasize that this analysis found that, of those effects
which could be quantified, the estimated benefits exceeded the estimated costs by $39 billion to
$72 billion. In order to reach a finding that H.R. 3434 would impose a net economic loss to
society, the net effect of all unquantified costs and benefits — including some important costs
and benefits to smokers themselves — would have to be additional costs of at least $39 billion
per year.

      Document Review

      While EPA makes no commitment to revise and reissue the present study, this document
has been developed and submitted to Congress in a form intended for review by outside
experts, interested parties, and the public.

      The principal author of the study is Dr. David H. Mudarri, an economist in the Indoor
Air Division of EPA's Office of Air and Radiation. This version of the study reflects extensive
review by other EPA offices, the Office of Management and Budget, the Council of Economic
Advisors, and the Department of Health and Human Services. In addition, a previous version
of this report was reviewed by several economists in the public and private sectors.

General Methodology

      Assessing Annual Costs and Benefits

       This analysis assesses the costs and benefits that would occur each year into the future
for present and  future generations. All estimates are represented as annual cost or benefits.
That is, all costs are converted to an annual equivalent that would occur every year into the
future based on 1990 population characteristics.  Varying time streams of costs or benefits are
converted to equivalent annual values using a 3% social discount rate. Sensitivity analyses
using 5% and 7% discount rates are also provided.

      Throughout this analysis it is assumed that H.R. 3434 would apply to all the previously
stated buildings, at all times, without exception. It was also assumed that full compliance
would be achieved within the first year of implementation.


Apr-.} 20,  1994                                2

-------
       Choice of Baseline for Assessing Costs and Benefits

       Per capita cigarette consumption has been falling steadily over the past several years.  In
addition, recent survey data suggest that many establishments already have some form of
smoking policy, and the percent of establishments that report having such policies has been
increasing in the past few years (DHHS, 1992; BNA 1991). Therefore, it was necessary to
establish a baseline from which to measure the effects of H.R. 3434 from enactment forward.
This was accomplished by a three step procedure.

       In the first step, the net costs and benefits are computed assuming current cigarette
consumption levels, and assuming that there are currently no restrictions. This is an artificial
baseline used for analytic convenience, but may be interpreted as a reflection of the cost and
benefit differences in a society with and without smoking restrictions comparable to H.R. 3434.

       Second, survey data were examined concerning the prevalence of smoking policies
already in place.  Using assumptions about the nature of those policies as well as policies in
small establishments not covered in those surveys, an estimate was derived that 23% of the
population is covered by smoking restrictions comparable to the requirements of H.R. 3434.
Current cigarette consumption levels, and 23% coverage by existing policies are therefore used
as the baseline for assessing the effects of H.R. 3434.  As a result, this study concludes that
23% of the previously calculated cost and benefits are attributable to  existing policies, and 77%
are attributable to H.R. 3434, or other future restriction policies, including private initiatives.1

       Finally, sensitivity analyses to the baseline assumptions are conducted by calculating the
changes to the costs and benefits that would result  from alternative assumptions about future
trends. The specific variables tested include future trends in cigarette consumption, and future
trends in the development of public and private smoking restriction policies which could take
place in the absence of national  legislation.  These alternative scenarios of potential future
trends are intended to demonstrate how the absolute levels of incremental costs and benefits
attributable to H.R. 3434 are sensitive to assumptions about the future prevalence of smoking
restrictions enacted by other public and private entities, and to future trends in cigarette
consumption.

       Other Economic Impacts

       Economic considerations which legislators may wish to consider go beyond just costs
and benefits assessed in this analysis.  Where information from this analysis sheds light on
some of these considerations, they are briefly described.
       i As this report was being prepared, the President signed into law the Coals 2000: Educate Amenca Act. This
legislation restricts smoking in all federally funded primary and secondary schools and in day care centers. Because a
sensitivity analysis is presented of the alternative baseline assumptions, no specific adjustments to account for this
nc\s law ucre made to the 23% baseline calculations used to assess the effect of H.R. 3434.

A on! 20, 1994                                 3

-------
                        Assessment of Costs and Benefits
                   In A Society With No Smoking Restrictions

       In this section,the costs and benefits associated with smoking restrictions are assessed
from a hypothetical baseline in which we assume that no restrictions in the public or private
sector are currently in place. The results in this section may be interpreted as measuring the cost
and benefit differences between a society with smoking restrictions versus a society without
such restrictions. After completing the analysis using this hypothetical baseline, the costs and
benefits of H.R. 3434 are assessed under estimates of current baseline conditions, and the
sensitivity of these results is evaluated using alternative baseline assumptions.

Section 1. Cost of  Implementing Smoking Restrictions

       Cost of Implementing Smoking Bans

       Despite the apparent wide use of some forms of smoking restrictions, there are no
published data on the cost of compliance. While many establishments have smoking policies, it
is not common for them to develop compliance cost information. Some preliminary data on
compliance costs for worksites may be published soon as part of the Community Intervention
Trial (COMMIT) project sponsored by the National Cancer Institute (Lewit, 1993). In the
absence of specific data, estimates are developed for start-up costs which would occur initially,
and for recurrent costs associated with maintaining the policy once it was established.

       In establishing smoking bans nationally, responsible entities would incur initial costs to
develop the policy, assign responsibilities, print and distribute information, print and post
signs, remove ashtrays and cigarette vending machines, provide outdoor receptacles, and
develop compliance procedures. Initial costs include a one time increase in participation in
smoking cessation  programs.  Subsequent to these initial start-up costs, establishments will
incur annual costs for policy maintenance. The estimates used in this analysis are provided in
Exhibit 1-1.  For simplicity,  the estimates were developed for a prototype company with 1,000
employees.

       According to Bureau of Labor Statistics (BLS) data, in 1990 there were approximately
118 million people  in the employed civilian labor force (excludes military). Subtracting
approximately 8 million for those who work in farming and the construction trades leaves 110
million persons employed indoors. The 110 million figure is used as the basis for calculating
national costs of implementing smoking bans nationally.

       The national cost estimate is presented in Exhibit 1-2. Initial  costs are annualized in
two ways.  First, all the initial costs will be experienced in the first year or so that the policy is
initiated. The annual equivalent of that initial cost is the interest cost at the appropriate
interest rate.2 In our analysis, we use a 3% social discount rate for our calculations.
Second, the initial costs will recur when new establishments are formed. ,We assume a 15%
turnover rate every year, so that 15% of the initial cost will be experienced every year by these
new establishments.3
       2 Since the relevant quantity is the equivalent annual cost that would occur every year, in perpetuity, this is
equivalent to borrowing the money and paying interest but no principal every year.


       3 An establishment here is any new business, as distinguished from a new building It is assumed that any
new establishment would experience the initial costs of establishing a policy.


April 20, 1994                                4

-------
       Outdoor Shelters with Smoking Bans

       A few firms that have thus far established smoking bans now provide some form of
outdoor smoking shelter for smoking employees. We assume that 10% of firms that ban
smoking will provide this feature, so we included an estimate in our calculations.

       A 9' x 12' free standing shelter (similar to a bus shelter) of aluminum frame with acrylic
glazing would cost about $4,800 or $44 per square foot (Means,1991). Less elaborate
structures, such as a bench under available shelter would cost considerably less. The cost-of
outdoor shelters is assumed to be, on average, about the same as the cost of indoor shelters, or
about $25 per square foot. Maintenance costs are included in the cost of establishing a smoking
ban.

       Costs of Smoking Lounges

       Smoking Lounge Requirements

       H.R. 3434 requires that specifically designated smoking lounges meet appropriate
standards for ventilation. To be properly ventilated, a smoking lounge should meet the
following requirements (EPA 1993, ASHRAE 1989).

       • Air from the smoking lounge should be directly exhausted to the outside by an
       exhaust fan.  Air from the smoking lounge should not be recirculated to other parts of
       the building. This may require that the plenum (the space between the ceiling tiles and
       the next floor) be sealed and isolated from the remainder of the building.

       • More air should be exhausted from the lounge than is supplied at all times. This
       insures that the area is under negative pressure, so that smoke does not drift to
       surrounding spaces.

       • The ventilation system should provide the smoking room with 60 cubic feet per
       minute (cfm) of supply air per smoker. Smoker densities of 7 persons per 100 square
       feet are often assumed. This air may be supplied by air transferred from other parts of
       the building such as corridors.

       • Nonsmokers should not have to enter the smoking room for any purpose.

       Construction of separately ventilated lounges in existing buildings may require
modification of the building ventilation system to isolate return air and establish the exhaust
system. Because of the requirement that air be exhausted directly to the outside, rooms with an
outside wall or on the top floor are preferred. On the outside, exhaust vents must be
adequately separated from the air intake vents which supply outside air  to the building's
ventilation system. The exhaust air may have to be filtered to avoid soiling on windows and on
the outside surface.

       There are three options for supplying  ventilation air to the smoking area. The first is to
transfer air from surrounding spaces.  This may enter through grills in the door or through a
separately constructed supply duct. The second option is to supply air from the main
ventilation system, and  the third option is to  provide a dedicated supply air system for the
smoking area.  The first option is the cheapest but also the most susceptible to creating
ventilation imbalances that compromise the integrity of the building's ventilation system and


April 20, 1994                                5

-------
may generate complaints. The second option requires that the ventilation system have sufficient
capacity to satisfy the supply air requirement for the room and still meet the demands of the
rest of the system. While most systems are built with excess capacity, a recent increase in
ASHRAE requirements for outdoor ventilation (ASHRAE 1989), or higher than designed
occupant densities, may reduce that excess. The last option is the most expensive, but will
offer the best guarantee that the system operates without complaint.

      Number and Size of Lounges

      It remains to estimate the lounge area that would normally be supplied to satisfy the
smoking population in those establishments that choose this option. There are no published
guides to help make this estimate. Therefore, the analysis derives an estimate by formulating an
example of a site with 100 smokers. Each smoker is assumed to smoke before work and during
lunch which will be outside of the building, and will take a 15 minute break once in the morning
and once in the afternoon. Each break will take 3 minutes in transit, and 12 minutes in the
smoking lounge.  Smokers will visit the lounge over a two hour period, averaging 50 smokers an
hour. If evenly distributed over the hour, there would be 10 smokers in the lounge all the time.
Assuming a 50 percent variance for peak use gives an estimate of 15 smokers in peak use.
Smoking lounges may be designed for 7 smokers per 100 square feet (ASHRAE  1989). This
means that about 200 square feet of smoking lounge would be needed to satisfy a peak demand
of 15 smokers.  The design parameter then is to build 200 square feet of smoking lounge for
every 100 smokers to be accommodated, or 2 square feet of lounge per smoking  occupant.
Exhibit 1-3 provides an estimate of the lounge construction requirements.

      Each smoker may count as a smoking occupant in different buildings.  For example, a
smoker spends some time at work, some time in a restaurant, in a  sports facility, etc.
Therefore, the number of potential  smoking occupants rather than numbers of smokers is a
better measure for estimating the number of smoking lounges that may be built.  In 1990, there
were approximately 46 million smokers in the United States, and about 65% of the adult
population was employed. Assuming the same employment rate for smokers would give us an
employed smoking population of about 30 million persons who are the smoking occupants for
the nation's workplaces.  In addition, there were approximately 117 million seat or bed
accommodations in educational facilities, restaurant facilities and hospitals (DOE 1991).
Assuming a capacity utilization rate of 80%, gives us approximately 100 million
accommodations, of which 25% (25 million) will be used by smokers (About 25% of the
population are smokers.). Thus, the total smoking occupant base for our calculations is taken
to be 30 million plus 25 million or 55 million smoking occupants.

       Cost of Construction and Maintenance of Smoking Lounges

       A significant cost element for smoking areas inside buildings is the potential cost of
ductwork. Since the area must be exhausted directly to the outside, rooms in the interior
portion of the building will require horizontal and/or vertical ducts. Vertical ducts would be
used to carry exhaust air from lower floors to the roof of the building through the central core of
the building Horizontal ducts would be used to reach the central core, or to exhaust the air
through an outside wall. The building structure can make vertical duct construction prohibitive
in existing buildings. Exhausting through the exterior wall can create films of exhaust materials
on windows unless the exhaust air is properly filtered, or the exhaust air may infiltrate back
into the building under certain conditions.
April 20, 1994

-------
       The Building Owners and Managers Association International (BOMA) reports that
retrofitting ventilation systems to accommodate smoking room ventilation requirements is very
costly, if not impossible in some cases. In new buildings, the design and installation of separate
ventilation systems is reported to cost $30 - $50 per square foot (Hurwitz 1993).

       Based on conversations with Digital Equipment Corporation and Connecticut Mutual
Life Insurance, Environmental Health & Engineering (EH&E) (1992) suggests that lounges cost
on the order of $40 - $50 per square foot, but could be as low as $20 per square foot if the. room
is already adequately enclosed, furnishings exist, and the room can be exhausted to a nearby
exterior wall with minimum difficulty.

       A firm in Dallas, Texas has made a business of providing smoking lounges to
commercial establishments (Poynter 1993). The firm avoids vertical ducts, filters the exhaust
air to avoid filming on windows, and provides a service contract to building owners which
allows them to pass on the .expense to tenants. According to its advertising literature, the firm
would charge approximately  $30 per square foot up-front costs plus an annual cost of about
$25 per square foot to completely maintain the space and the ventilation equipment. This
includes the rental fee for the  space.

       National Cost of Compliance under the Smoking Lounge Option

       The Poynter 1993 estimate for indoor lounges is somewhat lower than the other
estimates. However, it falls within the EH&E range, and is based on real market experience.
Further, it is reasonable to assume that the indoor smoking lounge option will be used only when
the costs are sufficiently low to make this option attractive.  The Poynter estimate is used to
calculate compliance cost.  It is then increased by 30% to provide a high estimate. Calculations
are provided in Exhibit  1-4. An initial average cost of $25 per square foot would be
experienced by all establishments that choose to provide interior smoking lounges to
accommodate smokers.  This is translated into an annual equivalent cost using a 3% discount
rate, to which is added a recurrent portion which would be experienced when old structures are
torn down and new ones built. We assume an average life of 20 years (or a turnover rate of 5%
per year), so that 5% of this cost would recur annually.

       The total annual cost estimates represent the national cost if every establishment  elected
to comply with smoking restriction requirements using the smoking lounge option.

       Proportion of Establishments Which May Choose to Provide Smoking Lounges

       Once fully implemented, only 10% (low estimate) to 20% (high estimate) of employees
are expected to be serviced by smoking lounges (see Exhibit 7-3b for justification of this
assumption). There  are several reasons that most entities are not expected to provide a
smoking lounge.

       • Smoking lounges -would have to meet stringent ventilation requirements and could not
       be spaces in which  nonsmokers would have reason to enter. Most existing rooms  with
       available outside exhaust such as rest rooms would not be allowed.

       • Smoking lounges are more expensive and more complicated than smoking bans. It is
       likely that smoking lounges will be chosen only when they are relatively inexpensive and
       convenient.
April 20, 199-1

-------
       • Smoking lounges may require exceptional diligence to insure that exhaust is adequate,
       that the space is under negative pressure, and that the building's ventilation system is
       balanced. Smoking lounges are generally associated with greater complaints and with
       lower reported satisfaction with the smoking policy than smoking bans, and smoking
       bans are becoming increasingly popular (Sorensen. ctal. 1991,1991a, 1992; Stillman. et
       al 1992)

       • Smoking lounges compete for space with other potential uses and could result in
       foregone rental revenue.

       Enforcement

       Costs to building owners for ensuring compliance in their building is included in the cost
of implementing smoking bans.  With respect to enforcement by governmental jurisdictions, H.R.
3434 provides no specific requirements for enforcement of its provisions, other than through
citizen suits in Federal court. Therefore, enforcement costs are difficult to quantify. Some
expenditures by the Federal government and by state and local governments can be expected for
information dissemination, though they may well be less than the value of current resources
devoted to passing controversial state and local legislation.* These expenditures were not
quantified. Information dissemination on  a uniform requirement at a national level would likely
enjoy greater efficiencies, and some reductions in resources currently devoted to passing and
maintaining controversial state and local legislation, and  in litigating private sector policies,
would likely occur.

       In a proposed rule concerning the sale or distribution of tobacco products to'individuals
under eighteen years of age, the Department of Health and Human Services 5 estimated  that
sting-type operations used by state governments would cost between $0.1 billion and $0.2 '
billion per year.  Recognizing that these two issues are not strictly comparable, an estimate of
between $0.1 billion and $0.5 billion per year appears plausible, and is used in this analysis as
the cost of enforcement in a society with no current compliance with standards comparable to
H. R. 3434.  (See Exhibit S-2 for estimates  of H.R. 3434 under current baseline  conditions.)

Section 2: Benefits from Reduced Exposure to Environmental Tobacco Smoke (ETS)

       Morbidity and Mortality Effects of Environmental Tobacco Smoke

       Lung Cancer and Other Respiratory Disorders

       The Environmental Protection Agency conducted a risk assessment of the respiratory
health effects of environmental tobacco smoke (EPA 1992).  The EPA report reviewed available
evidence on the health consequences and estimated lung cancer population risks from exposure
       4 Even when smoking restrictions are passed at the state or local level, campaigns to nullify the legislation or
to preempt local legislation with weaker state legislation can involve the expenditure of significant resources on both
sides of tnc issue No attempt was made to quantify current costs to state and local entities, though national
legislation would be expected to reduce many of these costs For an excellent analysis of this issue as it is manifested
in California, see Macdonald and Glantz (1994).


       5 Department of Health and Human Services, Substance Abuse and Mental Health Administration, 45 CFR
Part 96, Substance Abuse Prevention and Treatment Block Grants: Sale or Distribution of Tobacco Products to
Indix iduals Under 18 Years of Age Proposed Rule


Ar-.' 20. 199-5                                8

-------
to ETS. Included in the EPA report is a summary of the conclusions from other major reports.
This summary is paraphrased below.

       National Research Council (NRC). At the request of the U.S Environmental Protection
       Agency and the U.S. Department of Health and Human Services, the National Research
       Council (NRC) formed a committee in 1986 to evaluate the methods for assessing
       exposure to ETS and to review the literature on all of the potential health consequences
       of exposure. The NRC's report concluded that "considering the evidence as a whole,
       exposure to ETS increases the incidence of lung cancer in nonsmokers." Correcting for
       smoker misclassification and background ETS exposure, the NRC calculated an overall
       adjusted relative risk estimate of 1.42 for lung cancer in nonsmokers from exposure to
       ETS from spousal smoking plus background sources. The NRC report also suggested a
       link between ETS exposure and an increase in pulmonary symptoms and respiratory
       infections in children, chronic ear infections and middle ear effusions in young children,
       and an increased risk of low-birth weight babies for pregnant women exposed to
       prolonged exposure to ETS (NRC, 1986).

       Surgeon General. Also in 1986, a report by the Surgeon General concluded that available
       evidence leads to the conclusion that involuntary smoking is a cause of lung cancer, and
       that the children of parents who smoke have an increased frequency of respiratory
       infections, increased respiratory symptoms, and a slightly diminished rate of increase in
       lung function as the lung matures (DHHS 1986).

       Other Reports. Other major reports provide similar conclusions about various health
       effects from ETS exposure. The International Agency for Research on Cancer (IARC,
       1986) concluded that there was some link between environmental tobacco smoke
       exposure and lung cancer. In a report supported by R.J. Reynolds, an independent
       international panel of scientists (Spitzer. et al. 1990) concluded that evidence supported
       a positive association between residential exposure to ETS and  the risk of lung cancer.
       Spitzer. et al also concluded that there is strong evidence that children exposed in the
       home to ETS have higher rates of hospitalization for severe respiratory illness, and that
       exposure to ETS is related to asthma in children. Finally, the National Institute for
       Occupational Safety and Health (NIOSH) (1991) concluded that ETS meets the criteria
       of the Occupational Safety and Health  Administration for classification as a potential
       occupational carcinogen.

       Heart Disease

       EPA did not include an assessment of heart disease in its 1992 risk assessment of ETS
exposure.  However, NIOSH (1991) reviewed recent epidemiological evidence on the link
between exposure to ETS and both lung cancer and heart disease. NIOSH (1991) concluded
that the recent epidemiological studies "point to a pattern of health effects that is similar for
both smokers and nonsmokers exposed to ETS " With respect to heart disease, NIOSH (1991)
reviewed the evidence from several studies and concluded that the evidence suggested a
possible link between exposure to ETS and an increased risk for heart disease of nonsmokers.
The NIOSH (1991) review of the evidence is summarized in Exhibit 2-1 c.

       Studies-reported by Hole, et al. (1989).  Helsing. et al (1988), and Humble, et al. (1990)
       associated ETS exposure with an increase of heart disease among persons who never
       smoked  The studies by Hole, et al. (1989) and Helsing. et al  (1988) are large cohort
       studies of men and women who live in the same household Studies of these cohorts
April 20, 199-5

-------
      demonstrated an excess of heart disease in persons who lived with smokers and never
      smoked compared with persons who lived with nonsmokers and who never smoked.
      Furthermore, Hole, et al. (1989) and Humble, etal. (1990) show an increasing risk for
      heart disease mortality with increasing exposure to ETS at home. Helsing. etal. (1988)
      found a similar trend in women but not men.

      Experimental studies support the hypothesis that ETS exposure has deleterious effects
      on platelets and the endothelium and can decrease the time to onset of angina pectoris
      in patients with coronary artery disease.

      The evidence suggests a possible association between exposure to ETS and an increased
      risk for heart disease of smokers.

      Several studies have estimated the population risk of heart disease from ETS exposure.
Using a relative risk of 1.30 for ETS-exposed nonsmokers relative to unexposed nonsmokers,
Wells (1988) estimated that 32,000 deaths occur each year to nonsmokers from exposure to
ETS. Glantz and Parmley (1991) reviewed the epidemiological studies since 1984, including the
studies reviewed by NIOSH. They estimated a 30% increase in risk of death from ischemic
heart disease or myocardial infarction in nonsmokers exposed to ETS at home, resulting in an
estimated 37,000 heart disease deaths per year. They also noted a positive dose response
relation between the amount of smoking by the spouse and the risk of heart disease in the
nonsmoking spouse. Steenland (1992) analyzed available literature and predicted that
exposure to ETS solely from the one's smoking spouse could cause 15,000 to 19,000 ischemic
heart disease deaths per year, and estimated  overall that 35,000 to 40,000 cardiovascular
disease deaths per year were due to ETS exposure.

      In a recent position paper, the American Heart Association reviewed the available
evidence reported  above, including evidence on the mechanisms  for inducing heart disease
(Taylor, A.E. et al. 1992). They concluded that the risk of heart  disease is increased by about
30% among those exposed to ETS at home and could be much higher in those exposed at the
workplace, where higher levels of ETS may be present. In its position paper, the American
Heart Association adopts the Steenland estimate of 35,000 to 40,000 ETS-related
cardiovascular disease deaths per year (Taylor, etal. 1992).

      Base Estimates of Population Risk Used for Calculating Impacts

      Restrictions akin to those  in H.R. 3434  eliminate almost all nonresidential exposure to
ETS. Various time-activity pattern studies suggest people spend about 28% of their time out of
the home. About  18% of people's time is spent at work, about 2% outdoors, 4% in transit and
4% in other indoor environments (EPA, 1989). H.R.  3434 would apply to work and other
indoor environments, but would  only partially affect in-transit exposures. Assuming that
between half and three quarters of in-transit exposures are already controlled, and  that outdoor
exposures are insignificant, this study concludes that H.R. 3434  would apply to approximately
90% of nonresidential exposure to ETS.

      Exhibit 2-la and Exhibit 2-lb summarize estimates of U.S. mortality and morbidity
associated with ETS exposure.  Using this table as the basis for discussion, the mortality and
morbidity estimates to be used in the national cost calculations are summarized below.
April 20, 1994                               10

-------
       Lung Cancer. EPA estimates that 3,000 deaths occur each year from lung cancer due to
       ETS exposure. Of that number, 73% or 2,200 deaths per year are due to exposure
       outside of the home.

       Other (Nonlung) Cancers. There is insufficient evidence to support inclusion of nonlung
       cancers in this estimate.

       Heart Disease. Reported estimates for the effect of ETS on heart disease fall in the
       range of 32,000 to 40,000 heart disease deaths per year. Because these estimates are
       substantial, and because EPA (1992) did not specifically address heart disease in its
       risk assessment, two conservative adjustments are made to these figures.

       •     First, the low end of the range (32,000) is used as the high estimate, and this is
             reduced by 50%  (16,000) to obtain the low estimate.

       •     Second, an arbitrary additional conservative adjustment  of 75% is made to this
             range, providing a base estimate of 12,000 to 24,000 heart disease deaths  per
             year*.

       The same proportional breakdown between home (27%) and nonhome (73%) exposure-
       related deaths as was  reported by EPA for lung cancer is also used for heart disease.
       Therefore, 3,240 to 6,480 deaths per year are estimated for home exposures, and 8,760
       to 17,520 are assumed to be associated with exposure outside the home.

       Burn Deaths. Burn injuries and deaths are estimated elsewhere in this report.

       Other Mortality. Studies of the mortality due to ETS exposure from spontaneous
       abortion and sudden infant death syndrome respiratory conditions in infants, and short
       gestation and low birth weight are based on maternal smoking. These effects are not
       included in  the estimates presented in this study.

       Morbidity.  Studies of low birth weight and admission to neonatal intensive care units
       are based on maternal smoking and are also not included in the current estimates,
       however, the remaining morbidity effects are included.

       Estimated Mortality and Morbidity Effects Of Reduced Exposure to ETS

       Home Versus Nonhome Exposures

       While smoking restrictions would apply only to nonhome environments, it is estimated
in Section 6 below that between 3% and 6% of the smoking population would quit smoking as a
result of comprehensive smoking restrictions.  It is expected that this will result in an immediate
reduction of 3% to 6% of home exposures, and result in a commensurate  reduction in premature
deaths due to ETS exposures in the home. However, those who quit will eventually die of old
age or other causes, so this effect is transitory and will gradually dissipate over a period  of
some 50 years  .Offsetting this is an estimated  reduction in the number of persons who take up
smoking each year.  In Section 6, a reduction of 5% to 10% in the rate at which new smokers
enter the smoking population is assumed. As fewer persons enter the smoking population each
       6 Some adjustment may be appropriate also because there appears to have been an increase in the survival
rate of heart disease patients over the past several years due to advances in medical technology.


April 20, 1994                                11

-------
year, the size of the population decreases, reaching a maximum reduction of 5% to 10% in about
60 years. The net effect of quitting and reduced initiation is an average annual reduction of
between 4.2% and 8.5% in the smoking population (Exhibit 2-3).  This is assumed to translate
into an equivalent reduction in home exposure to ETS.7

       The greatest reduction in exposure to ETS will come as a direct result of smoking
restrictions in nonresidential buildings. Such smoking restrictions in non-residential buildings
are expected to reduce nonhome exposures by 90%.

       Proportional Reductions in Mortality Risk

       The impact of reduced exposure on mortality will not be immediate. It is assumed that
the mortality risk for persons will fall over time in the same proportion as the reduction in the
mortality risks of former smokers which gradually fall from the time they quit smoking. Exhibit
2-2 presents the proportional reductions in mortality risk (PRMR) from the time of reduced
exposure. Calculations are based on the reduction of cancer mortality risk for male smokers
since the time of quitting. Heart disease risks are assumed to fall twice as fast. Accordingly, it
is assumed that full recovery from excess mortality risk of persons exposed to ETS is
accomplished in 20 years.

       Estimated Annual Benefits from Mortality and Morbidity Effects

       Value of Premature Deaths Avoided  Front Reduced Exposure to ETS

       Based on the proportional reductions in mortality risks and the assumption that home
exposures would decrease by 4.2% to 8.5%, and that nonhome exposures would beireduced by
90%, the number of premature deaths avoided due to reduced exposure to ETS is calculated.
Exhibit 2-4 provides estimates of premature  deaths avoided in ten year increments, and for 50
year totals.  The largest benefits in terms of premature deaths avoided occurs as a result of
reductions in nonhome exposures.

       "Willingness to pay" measures are used to value  the premature deaths avoided due to
reduced ETS exposure. Willingness to pay measures assess the value that persons assign to
reducing their risk of premature death. The willingness to pay measure used for reduced
exposures to ETS is $4.8 million per premature death avoided.8 (See Appendix A-l for a
discussion of this estimate.)

       As shown in Exhibit 2-4, the reduction in home and nonhome exposures to ETS due to
the introduction of smoking restrictions in a society with  no restrictions would result in avoiding
an average 9,000 to 17,000 premature deaths per year (Exhibit 2-4).  The value of these
reductions, when using a willingness to pay measure, and discounting future reductions at a rate
       7 Estimates arc also presented in Section 6 that smoking restrictions will reduce, by 10% to 15%, the number
of cigarettes smoked per smoker in a 24 hour period It has been suggested that some smokers may increase their
consumption at home in order to make up for lost consumption outside the home No attempt was made to account for
this possible effect on ETS exposures because this does not appear to be the general case, and because the estimate of
reduced consumption used herein is a net reduction over the full day.


       8 Where possible, we rely on willingness to pay measures as opposed to medical cost savings and savings in
lost earnings as the value of avoiding premature death Using medical costs and lost earnings alone would represent
an incomplete measure of the economic value that individuals, and society, assign to avoiding mortal risk For example,
using only medical costs and lost earnings would imply that social welfare is improved when individuals die just after
retirement - before medical costs are high and just after salary earnings cease.


April 20, 1994                                12

-------
of 3%, would range from $39 billion to $71 billion per year (Exhibit 2-6). (See Exhibit S-2 for
estimates related to H.R. 3434 under current baseline conditions.)

       Value of Morbidity Effects from Reduced Exposure to ETS

       The estimated reductions in home and nonhome exposures result in reduced morbidity
as well as mortality. Morbidity effects from smoking restrictions are shown in Exhibit 2-6.
Reductions in the incidence of these effects are assumed to be immediate, with no significant
time delay, and are proportional to the reductions in exposure previously discussed. In a'
society with no current restrictions, the value of reduced morbidity from smoking restrictions
would be between $2.7 billion and $6.5 billion per year. (See Exhibit S-2 for estimates related
to H.R. 3434 under current baseline conditions.) This value is dominated by the value of
reduced cases of asthma induction, which is a chronic illness.  For this illness, a reduction of
between 1,400 and 4,000 cases annually is estimated.  To value the benefits from reduced
asthma induction, a willingness to pay measure associated with chronic bronchitis9 was used.

Section 3.  Savings in Operating and Maintenance Expenses

       Smoking in a building involves implicit operational and maintenance expenses. In
addition to emptying and cleaning ashtrays, the smoke, ashes, and accidental burns on furniture
and carpets create an additional housekeeping and general maintenance burden. For example,
BOMA reports that in a tightly monitored program, a member firm experienced a 15% reduction
in housekeeping costs when a non-smoking policy was introduced. Maintenance costs were not
covered in the monitoring program.  Changes that were observed included elimination of
emptying or cleaning ashtrays; reduction in high dusting and the dusting of desks and tabletops;
reduced detailed vacuuming around desks of smokers; and reductions in cleaning of Venetian
blinds and heating, ventilating and air-conditioning (HVAC) vents.  In addition, cleaning
personnel found that they spent less time moving articles on desks in order to remove ashes.
BOMA cautions that this was a tightly monitored program, and  that actual experience may
only produce an average of 10%  in overall housekeeping costs.10 Unit cost estimates for
smoking and nonsmoking interior spaces cleaning and maintenance are provided in Exhibit 3-1.

       Maintenance cost savings include less frequent replacement of furniture, and repair of
carpets, fewer repairs of computer equipment operated by smokers, and sometimes less
frequent painting. For maintenance expenses, the high estimate is distinguished from the low
estimate mostly by the inclusion of items for which there was considerable uncertainty.
Reduced computer repair costs are applied only to the high estimate for offices. Savings in the
replacement of furniture are applied only to the high estimate for offices, health care and
educational facilities, and to the high estimate for lodging and food service establishments.
Carpet repair savings are included in the high estimate for offices, mercantile and service, health
care, assembly, and education, and in the low estimates for lodging and food service
establishments. Detailed estimates  for maintenance are provided in Appendix B-l.

       The actual savings in both housekeeping and maintenance expenses would vary from
building to building depending upon use (e.g., offices versus retail stores). To provide an
estimate of the impact of Smoking restrictions on housekeeping and maintenance operations, we
       9 Based on willingness to pay measure for reducing incidence of chronic bronchitis (Neumann, et al 1994), we
estimated the value of avoiding chronic asthma to be SI 5 million per case.


       10 Personal correspondence from James Dinegar, BOMA International to David Mudarri, EPA. January 1994

April 20, 1994                                13

-------
developed separate prototype cleaning and maintenance savings estimates for establishments
representing different building uses: office, mercantile and service, food service, health care,
assembly, education, lodging, and warehouse and industrial buildings.

       The analysis reflects the assumption that the computed savings would not be realized
in many buildings. For example, only 43% to 60% of firms with smoking bans report such
savings (Carroll, 1990). There are many reasons for this. Firms differ in their needs for
cleanliness (e.g. hotels may be more sensitive than offices), some establishments already have
partial restrictions, and some establishments have rapidly changing personnel needs, calling for
frequent refurbishing activities not related to smoking.  Of course, many establishments may
experience savings, but may not notice.  Finally, and perhaps most importantly, many
establishments have permanent cleaning and maintenance personnel are paid fixed salaries,
while others may have contractual arrangements that would need to be renegotiated in order for
the savings to be realized.

       To estimate the square feet of floor area to which estimated  savings would apply, two
downward adjustments were made. First, these estimates are based only on that portion of the
spaces for which the items would apply. For example, persons normally do not smoke in
university classrooms, even in the absence of formal smoking restrictions, so savings would
result only in the office spaces or other common areas in classroom buildings.  Second, using
survey data the total commercial square feet for each building use was reduced by about 40% in
most cases. These two adjustments were used to arrive at an estimate of the applicable square
feet to which estimated savings would apply. The results of these adjustments and the
associated savings for each building use category are presented in Exhibit 3-2.

       Using the above described procedures, total savings shown in Exhibit 3-2 suggest that a
society with  no prior restrictions would experience a national savings of between $3.9 billion
and $4.4 billion per year in housekeeping, and $1.3 billion to $5.6 billion in maintenance,
resulting in a total savings of between $5 billion and $10 billion per year. (See Exhibit S-2 for
estimates related to H.R.  3434  under current baseline conditions.)

Section 4. Increased Productivity and Decreased Absenteeism Resulting from
            Smoking Restrictions

       Effects on Productivity

       On-the-Job Productivity Improvements from Reduced ETS. It is generally agreed that
exposure to ETS reduces  the productivity of "individual" building occupants, probably more
for nonsmokers than smokers, though no reliable basis for quantifying this effect could be found.
It is also likely that clearly defined and fairly implemented smoking policies will increase
"organizational" productivity by reducing potential conflicts between smokers and nonsmokers.
Evidence suggests that well-run smoking restrictions are popular among both employees and
management, and that when they are well managed and tailored to the social norms of
individual worksites, they are effective (Andrews. 1983; Hocking, et al. 1991; Hudzinski, 1990;
Peterson, et  al.  1988; Sorensen. et al. 1986; Sorensen. et al. 1991; Stave, et al. 1991).
Nevertheless, no basis for quantifying effects on organizational productivity could be found.

       Losses in Productivity from Restrictions to Smokers. While reduced ETS exposure
would likely have some positive  impact on smokers' productivity, the inability to smoke at their
workstations would likely have the opposite effect. This could occur for two reasons. First,
depending on their level  of addiction, some smokers who want to smoke, but are restricted, may

April 20, 1994                               14

-------
become uncomfortable, and less able to work effectively. Second, in order to smoke, smokers
would have to leave the workstation and go either to a designated smoking lounge or outside to
smoke. The resulting effect on productivity would be limited because taking occasional breaks
is already a normal part of the workday for most persons. Thus, while it is likely that some
decrement in productivity would result from these two effects, it is not likely to be large relative
to the productivity gains from reduced ETS exposure, and it would be difficult to quantify.

       Net Effect on Productivity.  There are both positive and negative influences on
productivity. The ETS effect would increase productivity and apply to all employees.
However, some smokers would work less effectively and some would spend more time going to
and from an allowable smoking area. This may decrease productivity, but would apply only to
smokers, and only to some portion of the smoking population.  Quantitative estimates of these
effects could not be developed for this study.

       Benefits from Reduced Absenteeism

       Several studies suggest that smokers have a greater number of sick leave absences from
work than  nonsmokers or former smokers. Using data from the 1979 Report of the Surgeon
General which estimated that 81 million working days were lost to smoking, and dividing by the
number of smokers, Kristein (1983) estimated the excess days lost due to smokers to be 2 days
per year. Rice, et al.  (1986) presents data from the supplement to the 1979 National  Health
Interview Survey showing an average of 4.9 work-loss days per employed person per year.
Non-smokers average 4.3 work-loss days while current smokers and former smokers combined
average 5.4 work-loss days (or 25% more than  non-smokers). Jackson, et al. (1989) also report
on other studies which showed 1.5 - 2.2 excess  workdays lost per month for smokers compared
with ex-smokers. Unpublished data from the 1991 National Health Interview Survey show a
difference in the reported mean days lost of 1 day between smokers and former smokers, and
1.7 days between smokers and never smokers.

       The difficulty in making direct comparisons between the absentee rates of smokers and
nonsmokers is that smokers are generally less educated, have lower incomes, are more likely to
be in blue collar jobs, and are more likely to be alcohol users. These factors could account for
some or all of the differences. However, recent evidence suggests otherwise. Reporting on a
study of an eastern North Carolina pharmaceutical company, and using a time-series control
group design, Jackson, etal. (1989) report a significant difference between current smokers and
ex-smokers, and between smokers before and after cessation. Likewise, Manning, etal. (1991)
examined data  from the 1983 National Health Interview Survey and  concludes that after
controlling for age, sex, race, and  education, former smokers had 31% more work-loss days and
current smokers had  52% more work days lost per year than never smokers.

       The 1993 NHIS data show a mean value in days lost from work of 3 days for never
smokers We will use Manning, et al's results to compute days lost for smokers and former
smokers since they controlled for confounding  variables. Thus, there are associated 0.9
(3 x .31) absentee days per year saved for each smoker who has quit and 1.5 (3 x .52) absentee
days per year for each potential smoker who has refrained from becoming a smoker.  Results are
shown in Exhibit 4-1.

       In Section 6 below, it is estimated that between 3% and 6% of current smokers would
quit as a result of national legislation that restricts smoking, resulting in an immediate decrease
in the number of smokers and an  equivalent increase in former smokers. It is also assumed that
the initiation rate for new smokers would decrease by 5% to 10%, resulting ultimately in a


Apr,!  20, 199-5                               15

-------
proportional reduction in the number of smokers, and an equivalent absolute increase in the
number of persons who have never smoked. However, the impact of the reduced initiation rate
would gradually take place over a 60 year period.

       Finally, the estimated value of excess absences per smoker or former smoker is presented
in Exhibit 4-2. The average value of each day lost is taken to be approximately $104 per day.
This is the weighted average of the median daily earnings of white collar, blue collar, and service
workers (weighted by the proportion of the smoking population in each of these categories).
The reported earnings are inflated by 24% to account for fringe benefits."

       Given that a smoker's average daily earnings including fringe benefits is about $104, and
discounting all future effects by 3% yields an estimated savings of under $0.5 billion per year
(Exhibit 4-3). This is quite insignificant when compared with other effects. (See Exhibit S-2 for
estimates related  to H.R. 3434 under current baseline conditions.)

Section 5: Savings in Smoking-Related Fires

       Smoking is the leading cause of fire deaths in the United States.  According to the
National Fire Protection Association (NFPA), smoking materials were the cause of more than
200,000 fires per year during the decade of the 1980s (Miller 1993). Smoking-related fires refer
to those caused by lighted tobacco products, and not cigarette lighters or matches.

       Most smoking-related fire injuries and property losses  are in residential environments,
which would not be subject to smoking restrictions. For example, between 1988 and 1990, there
was an annual average of some 1,328 smoking-related fire fatalities in residences compared to
an annual average of 38 fatalities in non-residential buildings (Exhibit 5-1).  Likewise, property
damage due to smoking-related fires over the same period  averaged some $316 million annually
for residences, compared to $115 million annually in non-residential buildings.

       This study estimates that smoking restrictions comparable to H.R. 3434 would
eliminate 90% of the smoking-related fires in the non-residential sector with  smoking bans. A
50% reduction in the nonresidential sector with smoking lounges is assumed. Further, because
smoking restrictions are postulated to reduce the smoking population through quitting and
reduced initiation, a proportional decrease in residential smoking-related fires is also estimated.
Estimated reductions in injuries, deaths, and property damage from smoking restrictions in a
society having no such restrictions is presented in Exhibit 5-2. Because a large portion of
smoking related fatalities is in residences, the annual benefits from smoking restrictions in public
buildings is minimal, and would be on  the order of $0.6 billion to $0.9 billion per year (Exhibit
5-3). (See Exhibit  S-2 for estimates related to H.R. 3434  under current baseline  conditions.)
                         V

Section 6: Impacts of Smoking Restrictions on Smokers

       The Health and Economic Consequences of Smoking

       In 1990, smoking caused an estimated 419,000 deaths in the United  States (CDC,
1993a). Of these, approximately 116,000 were caused by cancers of the lung, trachea, or
bronchus; 134,000 were caused by  heart disease; and 74,000 were caused by respiratory
diseases  Significant morbidity consequences are also associated with smoking. Smoking is
       11 The daily earnings are the BLS median weekly earnings divided by 5. The smoking prevalence rates by
labor category are given in DHHS 1989


April 20, 199-4                                16

-------
clearly a major cause of health impairment and death. However, about 25 billion packs of
cigarettes are sold each year. This means that individuals, with some knowledge of the risks of
smoking, make a conscious choice to smoke, despite the expense and the consequences.
Therefore, evaluating the social costs and benefits related to smokers is significantly different
from evaluating the social consequences of exposure to ETS or other pollutants.

       This subject is approached first by estimating the effects which would result from
smoking restrictions on the behavior of smokers and the resulting effects on health.  Issues
concerning the valuation of these effects are then discussed.

      The Impact of Smoking Restrictions on Smoking Behavior

      Several parameters which describe the smoking population and its smoking behavior are
relevant to assessing the health effects of smoking restrictions. Smoking restrictions may
increase the rate at which individuals quit smoking and thereby reduce smoking prevalence, and
it may reduce cigarette consumption by those who do smoke. Both of these factors will reduce
the per capita consumption of cigarettes, but the  impact on health will be less than proportional
to this reduction. Those who quit smoking become former smokers. The relative risk of health
impairment of former smokers is less than it is for smokers, but greater than it is for persons
who have never smoked (never smokers).  Similarly, the relative risk for smokers is reduced by
their average consumption, but it is not eliminated.  Those who quit or reduce consumption will
enjoy  a longer life expectancy, but the result in annual death rates will take time to develop as
the population ages.

      Smoking restrictions may also reduce the rate at which nonsmokers take up smoking.
Since  most persons who initiate smoking do so at a young age, the full impact of this will be
manifested over the long term. However, it will have a greater impact on health because the risk
of health impairment for persons who never smoked is less than it is for smokers or former
smokers.

      The Effect of Smoking Restrictions on Smoking Prevalence

      There is a plausible presumption that an institutional environment that restricts smoking
and that supports abstinence will reduce cigarette consumption among smokers, increase
attempts to quit improve quitting success rates, and reduce the rates at which nonsmokers take
up smoking. However, in 1989, the Surgeon General found that evidence of the effect of
smoking restrictions on actual smoking behavior was considered to be inconclusive (DHHS
1989). Since that time, a number of studies appear to support the conclusion that such
restrictions have some of the postulated effects on smoking behavior, and that these effects are
potentially more powerful than other antismoking efforts. These studies are summarized in
Appendix A-2 .

      Almost all of these studies relate to smoking restrictions in the workplace where smoking
behavior was compared before and after institution of a smoking policy. A few studies also
compared worksites with smoking restrictions to worksites without smoking restrictions. Only
two studies dealt substantively with the effect of smoking restrictions on the decision of
nonsmokers to take up smoking (smoking initiation rates). Most studies examined changes in
smoking prevalence and the proportion of smokers who quit (quit rates). A few studies also
provide data on the extent to which smokers change their consumption habits
April 20, 199-i                               17

-------
       Effect of Smoking Restrictions on Quit Rates™

       A review of recent studies of the impact of smoking policies on smoking behavior reveals
a wide range of potential effects on quitting behavior, including some studies that show no
effect at all. Some authors have offered an explanation of this phenomenon (Sorensen and
Pechacek, 1989; Stillman. et al. 1990; Woodruff, et al. 1993). Increased quit rates and
decreased rates of smoking prevalence that appear to follow the introduction of restrictive
smoking policies may reflect the acceleration of quitting behavior around the time the policies
are introduced. Since the quit rates are highest among those who otherwise planned to quit and
have in the past attempted to quit, it is possible that smoking restrictions result in a rapid
increase in quitting followed by a leveling off. Depending upon the time frame in which the ,
changes in behavior are measured, one could observe a wide range of quit rates all reflecting the
same basic phenomenon. For example, if behavior was measured just before and then again
after the policy, but smokers had already adjusted their behavior in anticipation of the policy
was initiated, their reaction would not be measured and changes in behavior would appear to
be minimal. Likewise, if behavior was measured just before smokers adjusted their behavior
and then soon  after, a rather substantial effect would be observed. However, if sufficient
follow-up studies were not conducted, one could not tell whether the higher quit rates that were
measured were actually maintained over the long term. This analysis adopts this as a plausible
explanation of the wide range of behavioral changes observed to date, and incorporates the
following derivation of the effect of H.R. 3434 on quitting.

       The first step in deriving the quit rate effect of smoking restrictions is to review quit Tales
reported following implementation of existing workplace smoking restrictions. Recent'-studies
suggest gross quit rates range from 9% to 17% (Exhibit 6-1). These gross quit rates must bet
adjusted, however, to take account of several factors.

       Second, some smokers who quit eventually renew their habit. Historical data suggest
this relapse rate is approximately 50% (CDC 1993b). Therefore, to develop an estimate of the
quit rate effect of national legislation, the gross workplace quit rate must be adjusted to net out
historical average quit rates observed in the absence of smoking restrictions. Data suggest this
rate is approximately 2.5% (CDC, 1993b).  Therefore, to develop an estimate of the quit rate
effect of comprehensive national legislation, the estimated gross workplace quit rate must be
adjusted to take account of relapse.  For the current analysis, the relapse rate is lowered to 30%
to reflect the characteristics of comprehensive nation-wide restrictions. Specifically, the
pervasiveness  of nationwide restrictions is expected to reduce overall relapse rates and their
implementation is expected to lead to substantial increases in stop-smoking support services
and other support programs which would further lower the relapse rate, particularly among
workers. Quit rates and relapse rates for smokers not subject to workplace restrictions,
however, are assumed herein to remain at long term historical average levels.

       Third, an adjustment must be made to account for portions of the adult smoking
population who are retired or not employed. This analysis assumes that the smoking behavior
of these individuals would not be affected  by national legislation.  Since approximately, 60% of
the adult population is employed, the quit  rates estimated for employed persons is reduced by
about 40%.

       Finally, an assumption must be made regarding the persistence of the effect of national
legislation on decisions to quit Plausible arguments can be made that nation-wide restrictions


       12 The term quit rate refers to the proportion  of smokers who become former smokers in a given time period.

April 20, 1994                               18

-------
would have an on-going influence on decisions to quit and on the success of attempts to quit.
However, consistent with the preceding discussion of quit rate persistence, the current analysis
adopts the conservative assumption that national legislation would lead to only a "one-time"
increase in net quit rates among the current population of smokers.

       As shown in Exhibit 6-1, the estimated net quit rates resulting from the above approach
ranges from 4% to 8% for employed individuals, and from 3% to 6% of the total current adult
smoking population. This net quit rate includes those individuals who are retired or otherwise
not employed.

       Effect of Smoking Restrictions on  Initiation Rates

       Most persons who become regular smokers do so as teenagers or young adults. About
75% of adults who have ever been regular cigarette smokers report that they tried their first
cigarette before the age of 18 and about half of them had become regular smokers by  that time.
Cigarette smoking among U.S. youth appears to have declined sharply in the late 1970s and
stabilized in the 1980s (CDC, 1991).

       Wasserman, et al.  (1991) estimated that legislation that substantially restricts smoking
in the workplace would reduce cigarette consumption by teenagers by 41%, and he reports that
most of this would result from the effects of reduced initiation among nonsmoking teenagers. If
this is interpreted to mean about three fourths of the effect is due  to reduced initiation, the 41 %
reduction would translate into roughly a 31 % reduction in initiation. Likewise (Woodruff, etal.
1993), when comparing worksites having a few smoking restrictions with those having a
smoking ban. reported a 43% difference (37% versus 21%) in the proportion of occasional
smokers who become regular smokers.

       EPA believes that these studies are not adequate to support the inclusion of a
substantial reduction of initiation rates in this analysis. Consistent with the conservative
approach to estimating the effect of smoking restrictions on smoking behavior, this analysis
assumes that smoking restrictions comparable to H.R. 3434 would reduce initiation rates by
only between 5% and 10%.  However, unlike the temporary increase in quit rates which would
have an immediate impact on smoking prevalence, the effect of reduced initiation would be to
gradually reduce the size of the smoking population, and would take more than a generation to
reach the majority of its impact. Nevertheless, those who fail to initiate smoking remain
nonsmokers, rather than former smokers, so that the health impact of reduced initiation is
greater.

       Effect of Smoking Restrictions on Cigarette Consumption

       With respect to reductions in consumption by smokers who continue to smoke after
national legislation is enacted, this analysis relies on recent studies that estimate that workplace
restrictions reduce consumption by 18% to 34% (Exhibit 6-1). These estimates are of reduced
consumption by smokers who continue to smoke and do not reflect double-counting of
reductions in aggregate consumption by smokers who quit.  Consistent  with the assumption that
only the smoking behavior of employed persons  would be affected by national legislation, this
analysis estimates that the effect of national legislation would be to reduce consumption rates
of smokers by about 10% to 15%.

       Net Effect of Smoking Restrictions
April 20, 199-5                                19

-------
       Based on the assumptions of a one time increase in quit rates and of a reduction in the
relapse rate for those who quit, this analysis projects a 3% to 6% decrease in the number of
smokers, and a corresponding increase in the number of former smokers. This  effect will
influence health and death incidence rates, but they will be less than if this were a reduction in
the number of persons who had ever smoked. The smokers who remain will be less able to quit,
and it is assumed that quit rates and relapse rates for those who remain smokers will be no
different than historic levels. However, smokers who continue to smoke will reduce their
consumption of cigarettes by approximately 10% to 15%.  If initiation rates were not affected,
the population of smokers would gradually increase to the level they would be without the
passage of smoking restriction legislation. However, the reduction in initiation rates will
gradually reduce the population of smokers by about 5% to 10%, resulting in a corresponding
increase in the number of those who never smoke.

      Health Effects of Smoking Restrictions on Smokers

       The reductions in smoking-related premature deaths result from the elevation of quit
rates, and reductions in consumption and initiation. The effect on premature death rates
depends on the disease, the age of the smoker, and the length of time this change of behavior
has been in effect. While a completely rigorous treatment of these effects is beyond the scope of
this assessment, simplified assumptions were used to account  for these effects and the varying
time stream in which these effects occur.

      The influence of changing of quit rates on the number of annual deaths due to smoking is
calculated in Exhibit 6-2 and Exhibit 6-3. The reductions in mortality ratio for smokers who quit
rise with years of abstinence and are provided in DHHS1990.  From this, the percent reduction
in mortality ratio (PRMR) for each ten year increment in the time of abstinence is calculated, as
presented in Exhibit 6-2. The number of deaths due to smoking for each age group of the
population is estimated using data from OTA (1985) and OTA (1993). This is used as a
baseline, and the age distribution and the calculated death rates are assumed to remain
constant over time in the absence of smoking restrictions. Given the PRMR, the proportion of
smokers who quit, and the age of the smoking population, a time stream of premature deaths
avoided from quitting is calculated (Exhibit 6-3). This analysis shows that in a society with no
smoking restrictions, quitting due to the imposition of smoking restrictions would result in
avoiding an annual average of between 5,000 and 11,000 premature deaths per year in the first
50 years.  ((See  Exhibit S-2 for estimates related to H.R. 3434 under current baseline
conditions.) Beyond 50 years, however, the cohort of quitters would have succumbed to death
from old age or other causes, resulting in no further effects.

      We assume that all persons who initiate smoking are under the age of 35. We use this
assumption to calculate the reduction in smoking prevalence over time, given our estimate of
reduced initiation. Premature deaths avoided are assumed to be proportional to smoking
prevalence in each age group. From this, we calculate the time stream of premature deaths
avoided from reduced initiation (Exhibit 6-4). We estimate that, in a society with no smoking
restrictions, reduced initiation from smoking legislation would result in an average decrease in
premature deaths of between 4,000 and 8,000  per year in the  first 50 years, approximately
18,000 per year between the 50th and 60th year, and approximately 20,000 every year
thereafter.  ((See Exhibit S-2 for estimates related to H.R. 3434 under current baseline
conditions.)

      Based on the data presented in DHHS (1989), and DHHS (1990), the mortality ratio for
lung cancer appears to be approximately proportional  to the number of cigarettes smoked.


April 20,  1994                               20

-------
This proportional relationship is representative of other diseases also, and it is further
assumed that the PRMR with years since the time of reduction follows the same pattern as that
calculated for quitting (Exhibit 6-2). Using these assumptions, the PRMR for reduced
consumption and the corresponding premature deaths avoided due to reduced consumption are
calculated in Exhibit 6-5. Relative to a society with no smoking restrictions, reduced
consumption from smoking legislation would be estimated to result in an  annual average
decrease in premature deaths of between 26,000 and 51,000 per year in the first 50 years, and
approximately 40,000 every year thereafter. ((See Exhibit S-2 for estimates related to H.R. 3434
under current baseline conditions.)

       Life Expectancies and Life Years Recovered from Smoking Restrictions

       Premature deaths of young or middle aged persons may be regarded differently than
premature deaths of persons in their late 60s. Therefore, an important dimension of the effects
of smoking restrictions is an assessment of the life years restored as a result of avoiding
premature deaths.

       In Exhibit 6-6 survival probabilities and probabilities of death are estimated for persons
who have ever smoked and persons who have never smoked using data provided by Hodgson
(1992), and using the age distribution of smokers and former smokers. The years lost by
premature death to the age of 65 and to life expectancy are then calculated as shown in Exhibit
6-7.

       In Exhibit 6-8, the life years extended to age 65 and to life expectancy are estimated
and reported by type of smoking behavior impact.  Accordingly,  it is estimated that those who
the average yearly expenditure for medical services for smokers and former smokers exceeds
that of nonsmokers. However, this is partially offset by the fact that nonsmokers live longer,
and continue to consume medical services during the extra years of life. When both of these
factors are taken into account, the result is a net excess burden on the medical service industry
of about $35 billion per year due to smoking.13  Implementing smoking restrictive legislation
would reduce this excess burden on the medical service industry by reducing the number of
smokers and former smokers. Assuming that medical expenditures are proportional to
smoking-related premature deaths, every reduction in annual premature deaths avoided by
virtue of some smokers quitting, cutting back, or failing to initiate smoking, would represent a
reduction of $85,000 per year for medical services.

       Net Effect of Smoking Restrictions on Premature Deaths and Medical Expenses

       The results of this analysis suggest that smoking restrictions, relative to a society with no
restrictions, would result in significant reductions in premature deaths per year from persons
quitting, cutting back, or declining to initiate smoking. These reductions would both extend
lives of those affected by 4 to 8 years for those who quit or reduce consumption, or by 15 years
for those who decline to smoke.  When future values are discounted by 3%, it is estimated that
for a society with no current restrictions, this would result in a reduction of approximately $3
billion to $4  billion in expenditures for medical services per year. Comparable reductions
related to implementation  of H.R. 3434 would  be about 77% of these values or $2.3 billion to
$-4 7 billion in reduced medical expenditures per year. (See summary of costs and benefits of
H R 3434 below.)
       13 This is estimated from information provided by Hodgson (1992) who compares excess medical costs over
the lifetime of ever smokers and never smokers. Similar data and procedures were also used by Manning et a] (1991)

April 20, 1994                                21

-------
Value of Benefits or Losses Regarding Smokers

       This analysis assumes that, faced with restrictions on where they may smoke, some
current smokers would quit and some would reduce overall consumption. In addition, these
restrictions would also tend to discourage many nonsmokers, such as teenagers, from becoming
smokers.

       These changes in behavior would result in significant improvements to the health of
smokers themselves, extension of their life expectancy due to the avoidance of premature death,
and reductions in medical expenses during their lifetime, as well as other benefits such as
increased safety and reduced property damage from smoking-related fires.

       Clearly, these health benefits to smokers are highly significant. However, there remain
46 million smokers who purchase approximately 25 billion packs of cigarettes annually, and
about 1 million persons become regular smokers each year. Since smokers do this despite the
risks and costs, one would presume that, provided these persons are rational, fully
knowledgeable, and are able to accurately assess the consequences of smoking, including
potential addiction, the benefits of smoking to them outweigh  the risks and costs. However, for
a number of reasons, this study does not attempt to estimate the economic value of the benefits
or losses regarding smokers.

       First, EPA is concerned that the economic measures traditionally applied to the health
consequences of pollution may not be appropriate to use in estimating the social value of
physical effects of smoking that occur to smokers themselves.  Exposure to pollution, such as
ETS, is essentially involuntary and uncompensated. Addiction arguments aside, smoking is a-
voluntary activity that results in other consequences for smokers, some positive and some
negative. These other consequences are not reflected in measures of value for health risk
reductions sometimes used by EPA. Applying traditional health risk valuation factors to health
consequences for smokers would therefore inappropriately omit the value of all these other
costs and benefits to smokers, resulting in potentially biased measures of the value change to
society.

       Second, analysts disagree whether the traditional economic models one might use to
measure the welfare change to smokers can be reasonably applied, particularly given limits on
available data. To obtain reasonable estimates of the change in net benefits to smokers, these
traditional models require that the subjects, smokers in this case, are acting rationally in
response to a free and open marketplace. Furthermore, these consumption decisions must either
be devoid of significant price distortions such as taxes and subsidies, or analytical corrections
must be made to take account of these distortions.  With respect to the rationality requirement,
questions have been raised whether the rational consumer choice model applies given the
apparent addictive nature of smoking.'4 Questions have also been raised whether the
consequences of taxes (e.g., cigarette tax) and subsidies (e.g., tobacco farm subsidies,
subsidized  health care) significantly distort consumer decision making in this case.
       14 Note, however, that some analysts subscribe to models of "rational addiction" which have been developed
and empirically tested (Becker and Murphy,!988), (Chaloupka,1991). However, these models do not take account of
those who underestimate the strength or the addiction or who, for whatever reason fail to appreciate the magnitude of
the adverse consequences Nor do they appropriately confront the difficult question of the social consequences from
teenage smoking. These models demonstrate that teenagers tend to disregard the future consequences of smoking more
so than adults (Chaloupka, 1991)


April 20, 1994                                22

-------
       Third, EPA is concerned that currently available data are insufficient to support using a
traditional economic model to estimate the change in net benefit to smokers caused by H.R.
3434.  The reason for this is H.R. 3434 does not prohibit smoking outright, nor does it change
the purchase price or quantity of cigarettes available.  Instead, H.R. 3434 only compels changes
in the location and/or time pattern of cigarette consumption.  This would be expressed in
economic terms as an increase in the transaction cost of smoking, and the transaction cost
would vary widely among smokers. Since it is unclear how the slope of the demand curve for
cigarettes might shift in response to a nonuniform increase in transaction costs to smokers, a
reliable measure of the change in net benefits to smokers cannot be derived.

       Based on the foregoing, this study makes no attempt at this time to express the health
consequences of H.R. 3434 to smokers themselves in social value terms.

Summary of Costs and Benefits With Reference To A Society With No Smoking Restrictions

       This completes the assessment of smoking restrictions using our analytic baseline of a
society with no restrictions. The results of this analysis are summarized in Exhibit 5-1, and
may be interpreted as the costs and benefits of smoking restrictions in a society where no such
restrictions exist.  This summary analysis forms the basis for estimating the effects that H.R.
3434 would have on current society, which is the subject of the remaining portion of this report.
April 20, 1994                                23

-------
                         Cost and Benefits of H.R. 3434
                          Based on Current Conditions

      S-l summarizes the costs and benefits of smoking restrictions that would occur on a
society with no current smoking restrictions. However, to assess the impact of H.R. 3434, the
level at which current restrictions already exist must first be assessed.

      Baseline Estimate of Compliance

      Establishments with Existing Smoking Policies. Many establishments already have some
form of smoking policy. The National Survey of Worksite Health Promotion Activities collected
information on worksite smoking policies. In 1992,59% of worksites covering more than 50
employees had a formal smoking policy that either banned smoking, or restricted smoking to
separately ventilated areas (DHHS, 1992). This represents a substantial increase since 1985
when only 27% of the worksites reported such policies. Exhibit 7-1 provides data from the
1992 survey (DHHS, 1992). In general, larger worksites were more likely to have such policies
than smaller worksites. The 1992 survey covered a wide variety of establishments in the
following categories: manufacturing; wholesale and retail; services; transportation,
communications, and utilities; finance, insurance, and real estate; and agriculture, mining, and
construction establishments.

      The Bureau of National Affairs and the Society for Human Resource Management have
conducted surveys since 1985 of members of the American Society for Personnel Administration
concerning workplace smoking policies. Organizations spanned a wide range of manufacturing
and commercial enterprises (BNA, 1986). In 1991,85% of responding firms had smoking
policies designed to address employee health and comfort, up from 5% in 1987 and 36% in
1986. Total bans on smoking existed in 34% of the firms, compared with 7% in 1987 and just
2% in 1986 (BNA, 1991).

      Many state and local laws require some form of smoking restriction in different indoor
environments, but for the most part, these are not very restrictive. Exhibit 7-2 summarizes 1993
data (unpublished) from the Centers for Disease Control, Office of Smoking and Health on the
types of state laws restricting smoking.  At the time the data were collected, no states had laws
banning smoking in public places or restricting smoking to separately ventilated areas.  Since
that time, Vermont has passed such a law, and similar laws exist in some local jurisdictions.
However, requirements for designated smoking areas (not separately ventilated) in public
places exist in 40 of the 53 states and territories, and 31 states or territories have similar
restrictions for restaurants.

      It is clear from the above that not all entities subject to H.R. 3434 would suffer the full
cost burden of compliance. Those that already comply would suffer no burden, and others that
partially comply may suffer only a partial burden. These issues are incorporated into the
assessment method described below.

      Current Compliance Estimates. DHHS (1992)  estimated that 59% of working
establishments with 50 or more employees have restrictive smoking policies which either ban
smoking or restrict it to separately ventilated areas. The BNA survey suggests that 34%
completely ban smoking. Data from these surveys show a  clear trend toward the establishment
of smoking policies in general, and total smoking bans  in particular, among American business
enterprises. However, the figures may overstate the proportion of building spaces actually


April 20, 199-1                              24

-------
covered by such policies. Coverage is inversely correlated with the size of firms (Exhibit 7-1).
The DHHS survey did not include firms under 50 employees. While the BNA survey did not
apparently exclude such firms, smaller firms are unlikely to have personnel administrators as
those who were surveyed.

       DOE (1991) provides data which suggests that 55% of employees in commercial
establishments are in buildings with less than 50 employees. Given this, the proportion of
employees currently covered by various  smoking restrictions under various assumptions about
the policies of small firms are estimated. The results are presented in Exhibit 7-3a.  For
example, there is widespread opinion among those involved in the smoking issue that only a
portion of small firms have a formal smoking policy.  Lewit (1993) showed that the compliance
rate by small establishments (under 50 employees) to a New Jersey law was less than half the
compliance rate for larger establishments.  If one assumes that 10% of small establishments
have smoking policies of the type reported in the DHHS survey, there would be 32% (vs. 59%)
of all employees covered with restrictive smoking policies, and 21% (vs. 34%) would be under a
smoking ban. The difference (11%) would have smoking allowed in separately ventilated areas.
The results only slightly change with alternative assumptions about small firms.

       This study therefore assumes that about 32% of employees are covered by restrictive
smoking policies that  either ban or restrict smoking to a separately ventilated area. This  is
composed of 21 % which completely ban smoking, and 11 % which allow smoking only in
separately ventilated areas. It is generally  believed that most of the survey responses which
indicate separate ventilated smoking areas do not meet the stringent separate ventilation
requirement of H.R. 3434 (see discussion in Section 2).  Assuming that the 10%  of employees
with ventilated smoking areas is composed of one fifth (2%) with adequate ventilation, 23%
(21 % + 2%) of all establishments are estimated to already be in compliance with standards
comparable to  the requirements of H.R.  3434 (Exhibit 7-3a).  Using the same distribution of
employees covered by bans and lounges, we estimate that about 80% to 90% will be covered by
a ban, and 10% to 20% by a lounge after H.R. 3434 is implemented (Exhibit 7-2b).  However, as
indicated in Section 1, a small portion of those under a smoking ban are likely to be serviced by
some form of outdoor smoking shelter. The actual degree of compliance may well be less than
this estimate because  of the way in which respondents answer questions about their policies.
For example, Rigotti (1992) reports that when assessing compliance with a local smoking
ordinance in Brookline, MA, self-reported prevalence of smoking policies greatly exceeded that
directly observed.

Summary Comparison of Costs and Benefits Of H.R. 3434 Based on Current
Conditions

       Exhibit S-2 summarizes the estimated costs and benefits of implementing national
legislation such as H.R. 3434, using a baseline estimate that 23 percent of the population is
already subject to such restrictions. Current  levels of cigarette consumption are also used to
assess costs and benefits under this baseline. The following sections provide additional detail
of these results.

       Costs of Implementing Smoking Restrictions

       Policy Implementation and Smoking Lounges

       The analysis shows that costs of  implementing legislation such as H.R. 3434 appear to
be quite low relative to the benefits that would  be achieved.  Establishments would experience


April 20, 1994                               25

-------
costs of establishing a policy, communicating the policy to employees or clientele, posting signs,
assuring compliance, and sometimes offering smoking cessation services.  These activities would
cost between $0.1 billion and $0.4 billion.

       The main determinant of cost is the expenditure associated with the construction and
maintenance of smoking lounges. Smoking lounges meeting the strict requirements of H.R. 3434
would have to meet stringent standards concerning ventilation and other provisions to insure
that the air in the lounge does not enter other parts of the building.  In addition, smoking
policies involving smoking lounges are generally associated with greater complaints and with
lower reported satisfaction than smoking bans, and smoking bans are becoming increasingly
popular (Sorensen. et al. 1991; 1991a, 1992; Stillman. et al 1991). Finally, the structural
features of many existing buildings make it infeasible or cost prohibitive to construct a smoking
lounge which would meet the retirements of H.R. 3434.. While the extent to which smoking
lounges will be relied upon to comply with this legislation is uncertain, for the reasons
mentioned above, this analysis estimates that only 10% to 20% of establishments would opt for
smoking lounges.

         The total cost of implementation by the public and private sector is estimated to be
approximately $0.4 billion (10% smoking lounge) to $1.4 billion15 (20% smoking lounge) per
year.

       Enforcement Costs

       Some expenditures by the Federal government and by state and local governments can
be expected for information dissemination, though they may well be less than the value of
current resources devoted to passing controversial state and local legislation.16 Costs to building
owners for insuring compliance in their building is included in the cost of implementing smoking
policies. With respect to enforcement by governmental jurisdictions, H.R. 3434 provides no
specific requirements for enforcement of its provisions, other than through citizens suits in
federal court. Therefore, enforcement costs are difficult to quantify. Based on an estimate in a
proposed rule concerning the distribution of tobacco  products to individuals under the age of"
18, an estimate of between $0.1 billion and $0.4 billion per year appears plausible, and is used
in this analysis as the cost of enforcement of legislation comparable to H. R. 3434 under current
baseline conditions.

       Health Benefits from Reductions in Environmental Tobacco Smoke (ETS)

       Tlie Health Consequences of ETS

       A major component of the benefits which could be achieved from national legislation .
that restricts smoking in public places is from reduced exposure of building occupants to ETS.
       15 Includes a higher cost per lounge


       16 Even when smoking restrictions are passed at the state or local level, campaigns to nullify the legislation or
to preempt local legislation with weaker state legislation can involve the expenditure of significant resources on both
sides of the issue No attempt was made to quantify current costs to state and local entities, though national legislation
would be expected to reduce many of these costs. For an excellent analysis of this issue as it is manifested in California,
sec Macdonald and Clantz (1994).


April 20, 1994                                26

-------
       Exhibit 2-1 presented information on the health consequences of ETS.  For the purpose
of valuing the benefits resulting from reduced exposure to ETS  due to smoking restrictions,
several conservative adjustments to these figures were made before making an assessment of the
value of benefits resulting from reduced ETS exposure. The reduction in exposure resulting from
smoking restrictions comparable to H.R. 3434 is estimated to result in an average reduction of
7,000 to 12,900 premature deaths per year over the first 50 years, and approximately 7,500 to
13,000 per year thereafter. The value of these reductions, when using a "willingness to pay"
measure, and discounting future reductions at a rate of 3%, would range between $33 billion
and $60 billion per year.

       To this has been added benefits to be achieved from improved health, mostly to
children, including reduced incidence of lower respiratory tract infections, ear infections, and
asthma. These benefits are estimated at  between $2 billion and $5 billion per year, most of
which is associated with reduced asthma induction among children.. For asthma, this analysis
reflects an estimated reduction of between 1,200 and 3,000 cases annually. To value the
benefits from reduced asthma induction, we used a willingness to pay measure associated with
chronic bronchitis, which is also a chronic respiratory disease.

       The total benefit from reduced ETS exposure includes both the benefits of premature
deaths avoided plus the benefits of reduced illness.  The total benefits due to reduced ETS
exposure is thus estimated to be $35 billion to $66 billion per year.

       Increased Comfort of Building Occupants:  This analysis assumes that, all else being
equal, no building occupant would prefer being exposed to environmental tobacco smoke, and
that most derive benefits from a smoke free environment. With the exception of the health,
productivity, and safety effects discussed elsewhere, these benefits are largely intangible, and
include such factors as reduced irritation and reduced environmental odor, and less annoyance
with tobacco smoke residuals left on hair and clothing. In the present study, no attempt was
made to quantify these benefits.  However, because the overall results do not include the
benefits of increased comfort, and because of the pervasive use of conservative assumptions in
this analysis, it is expected that the estimate of total benefits from reduced ETS exposure is
conservative.

       Savings in the Operation and Maintenance of Buildings

       Smoking in a building involves implicit operational and maintenance expenses.  In
addition to emptying and cleaning ashtrays, the smoke, ashes, and accidental burns on furniture
and carpets create an additional housekeeping and general maintenance burden.  For example,
the BOMA reports that in a tightly monitored program, a member firm experienced a 15%
reduction in housekeeping costs when a non-smoking policy was introduced. Maintenance costs
were not covered in the monitoring program.

       The actual savings in both housekeeping and maintenance expenses are expected to vary
from building to building depending upon use (e.g., offices versus retail stores). A separate
estimate was therefore developed for different uses. The cost saving estimates were then
allocated just to the portions of those buildings for which they  would apply.

       Finally;it was recognized that the computed savings would not be realized in many
buildings  Using survey data to indicate  proportions of establishments that experience
maintenance savings, the square feet to which savings would apply was decreased by about
40%  in most cases.
April 20, 1994                               27

-------
       Taking these factors into account, this analysis estimates that the savings in operating
and maintenance costs would amount to about $4 billion to $8 billion per year.i?

       Effects on Productivity

       On-the-Job Productivity Improvements from Reduced ETS. It is generally agreed that
ETS reduces the productivity of "individual" building occupants, and that clearly defined and
fairly implemented smoking policies wall increase "organizational" productivity by reducing
potential conflicts between smokers and nonsmokers.  While reduced ETS would likely have
some positive impact on smoker productivity, the inability to smoke at their work station
would likely have the opposite effect.
       The ETS effect would increase productivity and apply to all employees. However, some
smokers would work less effectively and some would spend more time going to and from an
allowable smoking area. This may decrease productivity, but would apply only to smokers,
and only to some proportion of the smoking population.  Quantitative estimates of these
effects could not be developed for this study.

       Benefits from Reduced Absenteeism

       After accounting for differences in socioeconomic characteristics between smokers and
persons who have never smoked, smokers are estimated to have about 50% more workdays lost
than persons who have never smoked, and former smokers are estimated to have about 30%
more workdays lost than never smokers (Manning, etal. 1991).

       Based on a review of recent studies, it is estimated that between 3% and 6% of current
smokers would quit as a result of national legislation that restricts smoking.  This would result
in an immediate decrease in the number of smokers and an equivalent increase in former
smokers. The initiation rate for new smokers is also estimated to decrease by 5% to 10%. This
would ultimately result in an equivalent proportional reduction in the number of smokers, and
an equivalent absolute increase in the number of persons who have never smoked. The average
daily earnings including fringe benefits of smokers is about $104, and discounting all future
effects by 3% yields an estimated savings of under $0.5 billion per year.

       Savings in Smoking-Related Fires

       Most smoking-related fire injuries and property losses are in residential environments,
which would not be subject to smoking restrictions.  As a result, the savings from smoking
restrictions would be minimal, and is estimated to be approximately $0.5 to $0.7 billion per
year.  This estimate includes the effect of an estimated reduction in cigarette consumption at
home because of quitting and reduced initiation.

       Social Benefits or Losses Regarding Smokers

       Smoking  restrictions comparable to those in H.R. 3434 would be expected to result in
some reduction in overall cigarette consumption. Faced with restrictions on where they may
       17 The housekeeping and maintenance cost savings, when compared to the cost of implementing smoking
rest net ions, including smoking lounges, suggest that some building owners may be induced to consider implementing
smoking restrictions in order to increase profits, even in the absence of smoking restriction legislation.


April 20, 1994                               28

-------
smoke, some current smokers may quit and some may reduce overall consumption. In addition,
these restrictions would also tend to discourage many nonsmokers, mostly teenagers),18 from
becoming smokers.

       These changes in behavior would result in significant improvements to the health of
smokers themselves, as well as other benefits such as increased safety and reduced property
damage from smoking-related fires. Based on the assumptions used in this analysis, EPA
estimates changes in smoking behavior would result in an average of 27,000 to 54,000 fewer
premature deaths per year among smokers during the first 50 years, and 47,000 to 92,000 fewer
premature deaths per year thereafter.19  On average, smokers who quit or cut back would'add
back an average of 5 to 8 years of life otherwise lost to smoking-related premature death. For
those nonsmokers who avoid becoming smokers, life is extended by an average of about 15
years.

       Clearly, these health benefits to smokers are highly significant. However, for a number
of reasons this study does not attempt to interpret the social value of these changes.
First, the economic measures traditionally applied to the health consequences of pollution may
not be appropriate to use in estimating the social value of physical effects of smoking which
occur to smokers themselves. Exposure to pollution, such as ETS,  is essentially involuntary and
uncompensated.  Addiction arguments aside, smoking is a voluntary activity which results in
other consequences for smokers, some positive and some negative. These other consequences
are not reflected in measures of value for health risk reductions sometimes used by EPA.
Applying such health risk valuation factors to health consequences for smokers would therefore
inappropriately omit the value of all these other costs and benefits to smokers, resulting in
potentially biased measures of the welfare change to society.

       Second, analysts disagree whether the traditional economic models one might use to
measure the welfare change to smokers can be reasonably applied, particularly given limits on
available data.  To obtain reasonable estimates of the change in net benefits to smokers, these
traditional models require that the subjects, smokers in this case, are acting rationally in
response to a free and open marketplace. Furthermore, these consumption decisions must either
be devoid of significant price distortions such as taxes and subsidies, or analytical corrections
must be made to take account of these distortions. With respect to the rationality requirement,
questions have been raised whether the rational consumer choice model applies given the
apparent addictive nature of smoking.20  Questions have also been raised whether the
       is CDC (1991)


       19 The difference in death rates each year results from the different time patterns of the effects of quitting and
cutting back on consumption, and because the analysis assumed that it would take 60 years reduced annual initiation
to complete its effect on the size of-the smoking population. Therefore, the 54,000 to 92,000 premature deaths reflect
annualrates after 60 years for reduced initiation, In addition, this analysis assumed H.R 3434 would have only a
"one time" effect on decisions to quit, rather than an ongoing effect. Therefore, the H.R. 3434-related quitting
eventually disappears as the cohort of smokers motivated to quit by H.R. 3434 dies from old age or other causes.


       20 Note, however, that some analysts subscribe to models of "rational addiction" which have been developed
and empirically tested (Becker and Murphy.1988), (Chaloupka,1991). However, these models do not take account of
those who underestimate the strength of the addiction or who, for whatever reason fail to appreciate the magnitude of
the adverse consequences Nor do the models appropriately confront the difficult question of the social consequences
from teenage smoking These models demonstrate that teenagers tend to disregard the future consequences of smoking
more so than adults (Chaloupka, 1991)


April 20, 1994                                 29

-------
consequences of taxes (e g., cigarette tax) and subsidies (e.g., tobacco farm subsidies,
subsidized health care) significantly distort consumer decision making in this case.

       Third, EPA is concerned that currently available data are insufficient to support using a
traditional economic model to estimate the change in net benefit to smokers caused by H.R.
3434  The reason for this is that H.R. 3434 does not prohibit smoking outright, nor does it
change the purchase price or quantity of cigarettes available. Instead, H.R. 3434 only compels
changes in the location and/or time pattern of cigarette consumption. This would be expressed
in economic terms as an increase in the transaction cost of smoking, and the transaction cost
would vary widely among smokers. Since it is unclear how the slope of the demand curve for
cigarettes might shift in response to a nonuniform increase in transaction costs to smokers, a
reliable measure of the change in net benefits to smokers cannot be decided.

       Based on the foregoing, this study makes  no attempt at this time to express the health
consequences of H.R  3434 to smokers themselves in social value terms. Future versions of this
analysis may  make such an attempt if these analytical problems and data limitations are
resolved.

Comparing Costs and Benefits of H.R. 3434

       Bearing in mind the limitations presented by the current analysis two principal findings
emerge from this analysis  First, it is clear that, for those items quantified in this study, the
benefits of smoking restrictions comparable to H.R. 3434 substantially outweigh the costs.
Second, comparing the high  estimate of costs with the low estimate of benefits does not change
the fundamental conclusions that benefits significantly exceed costs.

       It should be noted that no attempt was made in the current analysis to evaluate the
costs and benefits of altering provisions of the legislation. Throughout this analysis, no
exception in scope or timing of the provisions of H.R. 3434 were assumed. Clearly, changing
provisions such as the scope or timing of the restrictions would affect both costs and benefits.

       Comparisons with Alternative Baselines

       Given the rapid increase in public and private smoking restrictions in the last few years,
and the downward trend in cigarette consumption, it is likely that the future will bring
additional restrictions, and consumption may continue to fall without passage of H.R. 3434.
Of course, the future is always uncertain, and tobacco consumption and smoking restrictions
will be influenced in part by campaigns of tobacco and anti- smoking interests  (Samuels and
Glantz, 1991, Macdonald a'n'd Glantz, 1994).

       Alternative scenarios were also constructed which varied the assumption about future
baseline consumption of cigarettes. Similar to other major influences such as the national
educational campaigns about smoking, national legislation restricting smoking in public
buildings may contribute to continued downward trends in cigarette consumption.
Alternatively, these downward trends  may continue or level off regardless of the advent of such
legislation  However, sensitivity analysis indicates that, as in the case of alternative public and
private restriction policies, varying  the assumed baseline trend in future cigarette consumption
has no significant effect on the result that social benefits would be expected to exceed costs by
a substantial margin
Apr;! 20, 1994                                30

-------
       Results using alternative baseline scenarios are summarized in Exhibit S-3. A graphic
display is presented in the exhibit. The first scenario presents results under an assumption that
there are no restrictions currently in place and that per capita consumption of cigarettes remains
at current levels. This is the base scenario used to calculate benefits and costs of smoking
restrictions. The second scenario differs from the first in that it assumes that 23% of the
population is covered by policies which are comparable to those in H.R. 3434. This is the
baseline used to assess the impact of H.R. 3434.  The third scenario assumes that restrictive
smoking policies will continue to be adopted in the public and private sector without the
passage of H.R. 3434, and that these will continue and achieve a  level of 75% compliance with
standards comparable to requirements of H.R. 3434 in 10 years and remain at that level
thereafter. The fourth scenario combines an assumption of 23% existing coverage with an
assumption that per capita cigarette consumption will continue to fall for ten years into the
future at a 3%  per year, and then remain constant after that. The last scenario is the same as
the fourth except that per capita cigarette consumption is assumed to fall for 20 years before it
levels off.

       Under all of the alternative scenarios presented in this analysis, assumptions about the
pervasiveness  of future restrictions in the absence of H.R. 3434 have virtually no effect on the
findings that, for the items quantified in this study, the social benefits would exceed the costs.

       A 3% discount rate is used for all scenarios. While the absolute level of estimated costs
and benefits are different under each scenario, our qualitative conclusions remain unchanged.

Other Economic Considerations

       The estimates of costs and benefits covered in this analysis are a subset of potential
economic consequences that policy makers may wish to consider.

       Restoration of Lost Income:  Implementing smoking restrictive legislation nationally
would result in the restoration of approximately $31,00021 for each pre-retirement year of
premature death which is avoided because of smokers who quit, cut back, or fail to become
smokers  because of H.R. 3434. On average, we estimate that each premature death avoided
because of quitting and reduced consumption would add approximately 1.4 to 4 salary earning
years, and each premature death avoided from persons who refrain from becoming smokers
would add  approximately 11 salary earning  years of life.22 When future values are discounted
at 3%, this analysis estimates that between $3 billion and $6 billion of lost income would be
restored. A similar estimate was not possible for persons exposed to ETS, though this effect
should be considered  The importance of this impact  is enhanced to the extent that some
children, spouses, the elderly or disabled may be dependent on such income.

       Reduced Burden on the Medical Service Industry:  Every year, the average expenditure
for medical services for smokers and former smokers exceeds that of nonsmokers.  However,
this is partially offset by the fact that nonsmokers live longer, and continue to consume medical
services during the extra years of life. When both of these factors are  taken into account, the
result is a net excess burden on the medical service industry of about  $35 billion per year due to
       21 The estimated annual earnings of smokers is inflated by 20% to account for earnings after the age of 65,
based on OTA (1993)


       22 Salary earning years are assumed to be years prior to the age of 65


April 20, 1994                               31

-------
smoking.23 Assuming that changes in the excess medical expenditures due to smoking
restrictions would be proportional to changes in smoking-related premature deaths, this
analysis estimates that every reduction in annual premature death would represent an annual
reduction of $85,000 for medical services. Accordingly, when future savings are discounted at
3%, H.R. 3434 would reduce annual expenditures for medical services by $2.3 billion to $4.7
billion per year. It is not clear from our analysis what net impact reduced exposure to ETS
would have on  the medical service industry.

       Potential Cost to Social Security and other Pension Funds: Persons who would
otherwise have  died prematurely would live longer under smoking restrictions and collect
pensions and social security during those extended years. Each premature death avoided for.;
smokers who quit, cut back, or fail to initiate smoking represents an extension of life of about 5
to 7 years beyond the age of 65, during which time they would be eligible to collect a pension -
annuity. Data are not currently available to support a similar estimate for ETS exposed
individuals.

       Reduced Revenues from Cigarette Sales and Excise Taxes: Implementation of national
legislation to restrict smoking in public buildings would reduce overall cigarette consumption by
approximately  11% to 17%, and this impact would  occur within the first few years of
implementation. This would result in a corresponding reduction in cigarette tax revenues.24
However, these could be offset, to some extent, by the social benefits of alternative agricultural
production or other taxable uses of farmland.

       Employment Dislocations:  Reductions in demand  for cigarettes and medical services
would involve some temporary dislocations of persons employed in these industries.

Conclusions

       Given data limitations, and  the uncertainties inherent in cost-benefit analysis of public
health and environmental policies, this analysis does not purport to provide definitive
conclusions about the overall merits of national smoking restriction legislation.
Nevertheless, while recognizing that several effects  of H.R.  3434 including effects on
productivity, comfort from reduced exposure to ETS, and the net losses or gains regarding
smokers,  were not quantified, this analysis demonstrates that, for those items that were
quantified, the  estimated benefits of H.R. 3434 exceed the estimated costs by a substantial
amount. This analysis suggests that the net effect of these excluded items would have to
represent a loss exceed $39 billion to $72 billion per year for costs to exceed benefits.

       As suggested in Exhibit S-4, the overall findings of substantial net benefits are not
altered by comparing high costs to low benefits, or by alternative discount rates.  Furthermore,
while the magnitude of the net benefits specifically allocated to H. R. 3434 is dependent on
one's assumptions about baseline conditions, these assumptions go more to the question of
whether or not  to capture these net benefits through national legislation or by other public
and/or private initiatives.
       23 This is estimated from information provided by Hodgson (1992) who compares excess medical costs over
the lifetime of persons who have ever smoked, and persons who nave never smoked. Similar data and procedures were
also used by Manning et al (1991)


       24 For an excellent comparison of what smokers pay in excise taxes, medical expenditures, and contribution to
retirement funds, relative to the value of the services they receive for those payments, see Manning, et al (1991).
However, the net monetary payments made by or to smokers is not a useful index for measuring the overall social
benefits or costs of smoking restrictions. As previously described, .willingness to pay measures are more appropriate.
Also, our costs and benefits do not count transfers of costs or benefits from one group in society to others


April 20, 1994                                32

-------
                                References

American Society of Heating, Air Conditioning and Refrigerating Engineers Inc. (ASHRAE).
      1989. Ventilation for Acceptable Indoor Air Quality. ASHRAE Standard 62-1989.
      Atlanta, GA.

Andrews, Joseph L. 1983. Reduced Smoking in the Hospital: An Effective Model Program.
      Special Report. CHEST. Vol. 84, No. 2, August.

Arundel, A. etal. 1987 .  Never-smoker Lung Cancer Risks from Exposure to Particulate
      Tobacco Smoke.  Environ. Intl.  Vol. 13, pp. 409-426.

Baile, Walter F. etal.  1991. Impact of a Hospital Smoking Ban: Changes in TobaccoUse and
      Employee Attitudes.  Addictive Behaviors. Vol. 16. pp. 419-426.

Becker, Gary S. and Murphy, Kevin M. 1988. The Theory of Rational Addiction. Journal of
      Political Economy. Vol. 96. No. 4.

Beiner, Lois. etal. 1989.  A Comparative Evaluation of a Restrictive Smoking Policy in a
      General Hospital. American Journal of Public Health. Vol. 79. No. 2. February.

Best Western Corporate Headquarters.  1994. Personal conversation between Jennifer Jones
      of SocioTechnical Research Applications, Inc. and Best Western Corporate
      Headquarters, Arizona. March.

Blomquist, Glenn. 1981. 'The Value of Life: An Empirical Perspective."  Economic
      Inquiry, Vol. 19, No. 1. As cited in Unsworth (1992).

Borland, Ron. etal. 1991. Predicting Attempts and Sustained Cessation of Smoking After the
      Introduction of Workplace Smoking Bans. Health Psychology. Vol 10. No. 5.
      pp. 336-342.

Borland, Ron. et  al. 1990. Effect of Workplace Smoking Bans on Cigarette Consumption.
      American Journal of Public Health.  Vol. 80. No 2. February.

Brenner, Hermann and Mielck, Andreas. 1992.  Smoking Prohibition in the Workplace  and
      Smoking Cessation in the Federal Republic of Germany.  Preventive Medicine. Vol 21.
      pp  252-261.

Building Owners and Managers Association (BOMA). 1988. Office Tenant Moves and
      Changes.  Why Tenants Move, What They Want, Where They Go. Washington,  D.C.

Building Owners and Managers Association (BOMA) International.  1990. Office Building
      Cleaning Operations in North America: A Study of Custodial Management Practices
      and Costs p.  57  Washington, D.C.

Bureau of Labor Statistics (BLS).  1991. Employment and Earnings. January.

Bureau of National Affairs Inc. (BNA).  1986. Where There's Smoke: Problems & Policies
      Concerning Smoking in the Workplace.


                                       R-l

-------
Bureau of National Affairs Inc. (BNA). 1991. SHRM-BNA Survey No. 55: Smoking in the
      Workplace: 1991. In Bulletin to Management. August 29.

Carroll, Stewart J. 1990. An Overlooked Cost of Employee Smoking.  Personnel, August.

Centers for Disease Control (CDC). 1990. Federal Emergency Management Agency.

Centers for Disease Control (CDC).  1991. Cigarette Smoking Among Youth - United States,
      1989. MMWR. V. 40, no. 41.

Centers for Disease Control (CDC).  1992. Discomfort from Environmental Tobacco Smoke
      Among Employees at Worksites with Minimal Smoking Restrictions - United States,
      1988. MMWR, V. 41, No. 20.

Centers for Disease Control (CDC).  1993. Cigarette Smoking Among Adults - United States,
      1991. MMWR, V. 42, no. 12.

Centers for Disease Control (CDC).  1993a. Cigarette Smoking-Attributable Mortality and
      Years of Potential Life Lost - United States, 1990. MMWR, Vol. 42, No. 33.  August.

Centers for Disease Control (CDC). 1993b. Smoking Cessation During Previous Year Among
      Adults - United States, 1990 and 1991. MMWR, V. 42, No. 26.

Chaloupka, Frank. 1991.  Rational Addictive Behavior and Cigarette Smoking. Journal of
      Political Economy. Vol. 99, No. 4, pp. 722-742.

Chaloupka, Frank. 1992.  Clean Indoor Air Laws, Addiction and Cigarette Smoking.
      Applied Economics, Vol. 24, pp 193-205.

Consumer Product Safety Commission (CPSC). 1993. Societal Cost of Cigarette Fires. US
      Consumer Product Safety Commission and the National Public Services Research
      Institute, August.

Daughton, D.M. etal. 1992. Total Indoor Smoking Ban and Smoker Behavior. Preventive
      Medicine. Vol 21. No. 5. pp 670-76. September.

Department of Health and Human Services (DHHS). 1986. The Health Consequences of
      Involuntary Smoking. A Report of the Surgeon General.

Department of Health and Human Services (DHHS). 1989.  Reducing the Health
      Consequences of Smoking: 25 Years of Progress. A Report of the Surgeon General.

Department of Health and Human Services (DHHS). 1990. The Health Benefits of
      Smoking Cessation. A report of the Surgeon General.

Department of Health and Human Services (DHHS). 1991. Strategies to Control Tobacco
      Use in the United States:  a blueprint for public health action in the 1990's.
      Monograph 1.
                                      R-2

-------
Department of Health and Human Services (DHHS). 1992.  1992 National Survey of
      Worksite Health Promotion Activities.

Department of Health and Human Services (DHHS). 1994. Preventing Tobacco Use Among
      Young People. A Report of the Surgeon General.

Department of the Army. 1972. Engineered Performance Standards Public Works
      Maintenance Janitorial Formulas. October.

Departments of the Army, the Navy, and the Air Force. (DOA) 1981.  Janitorial Handbook.
      Army TB 420-10, NAVFAC P-706.0, Air Force AFM 85-45.  Washington, DC. April.

Dewey, Martin.  1985. Smoke in the Workplace: An Action Manual for Non-Smokers.
      Toronto, Ontario.

DiFranza, J.R. 1993.  Tobacco Abuse: Morbidity and Mortality in the Pediatric Population
      Due to the Use of Tobacco Products by Other People. Submitted to JAMA for
      publication.

Dinegar, James. 1994. Personal correspondence from James Dinegar of Building Owners
      and Managers Association, Washington, DC to David Mudarri EPA. January 1994.

Douglas, S. and Hariharan, G. 1993.  The Hazard of Starting Smoking: Estimates from a
      Split Population Model.

Environmental Health and Engineering Inc. (EH&E). 1992. Summary Analysis of
      Effectiveness and Costs Associated  with Workplace Smoking Policies. Draft Report
      prepared for Indoor Air Division, U.S. Environmental Protection Agency. December.

Environmental Protection Agency (EPA). 1989. Report to Congress on Indoor Air Quality.
      Volume II:  Assessment and Control of Indoor Air Pollution. EPA/400/1-89/001C.
      Washington, D.C. August.

Environmental Protection Agency (EPA). 1992.  Respiratory Health Effects of Passive
      Smoking: Lung Cancer and Other   Disorders.  EPA/600/6-90/006F.  Washington,
      D.C. December.

Environmental Protection Agency (EPA)  1993. Second Hand Smoke: What You Can Do
      About Secondhand Smoke as Parents, Decision Makers, and Building Occupants. 402-
      F-93-004. Washington, D.C. July.

Fisher, Ann. et al. 1989.  The Value of Reducing Risks of Death: A Note on New Evidence.
      Journal of Policy Analysis and Management. Vol 8. No. 1. pp 88-100. As cited in
      Unsworth (1992).

Garland, C et al 1985.  Effects of Passive Smoking on Ischemic Heart Disease Mortality of
      Nonsmokers. Am. J.  Epidemiol. Vol. 121, No. 5., pp. 645-650.

Gillis, C.R etal  1984. The Effect of Environmental Tobacco in Two Urban Communities
      in the West of Scotland. Eur. J. Respir. Dis. Vol. 65, Suppl. 133, pp. 121-126.
                                      R-3

-------
Glantz, S. and Parmley, W.W. 1991. Passive Smoking and Heart Disease: -Epidemiology,
      Physiology and Biochemistry. Circulation. Vol. 83, pp. 1-12. As referenced in:
      N1OSH. Current Intelligence Bulletin 54. June 1991.

Gottlieb, Nell H. et al 1990.  Impact of a Restrictive Work Site Smoking Policy on
      Smoking Behavior, Attitudes, and Norms. Journal of Occupational Medicine. Vol. 32.
      No. I.January.

Grainger Industrial and Commercial Equipment and Suppliers. 1992. General Catalog No,
      381, p. 1225 and p. 1543.

Hamilton, Joan O. 1987. A Sign of the Times: Smokers Need Not Apply. Business Weekly.
      July 27, 1987.

Helsing, K.J. et al. 1988. Heart Disease Mortality in Nonsmokers Living With Smokers.
      Am. J. Epidemiol.  Vol. 127, No. 5, pp. 915-922.

Hersch, J. et al.  1989. Cigarette Smoking, Seatbelt Use, and Differences in Wage-Risk
      Tradeoffs.  The Journal of Human Resources, Vol. 25, No. 2, pp. 202-227.

Hirayama, T. 1984 Lung  Cancer in Japan:  Effects of Nutrition and Passive Smoking. In:
      Mizell, M., and Correa, P., eds. Proceedings of the International Lung Cancer Update
      Conference. Tokyo, Japan: VerlagChemie International, pp. 175-195.

Hocking Bruce,  et al. 1991.  A Total Ban on Workplace Smoking Is Acceptable and
      Effective  Journal of Occupational Medicine. Vol  33. No. 2. February.

Hodgson, Thomas A  1992. Cigarette Smoking and Lifetime Medical Expenditures. The
      Milbank Quarterly. Vol 70, No. 1, pp. 81-125.

Hole, D.J. et al  1989. Passive Smoking and Cardiorespiratory Health in a General
      Population in the West of Scotland. Br. Med. J. No. 6696, Vol. 299, pp. 423-427.

Hudzinski, Leonard D. 1990  One-Year Longitudinal Study of a No-Smoking  Policy
      Medical Institution. CHEST. Vol. 97. No. 5. May.

Humble, C. et al  1990 Passive Smoking and 20-year Cardiovascular Disease  Mortality
      Among Nonsmoking Wives, Evans County, Georgia. Am. J. Public Health, Vol. 80,
      No.5, pp  599-601

Hunvitz, Mark W. 1993 Representing the Building Owners and Managers Association
      (BOMA) International  Testimony before the Subcommittee on Public Buildings and
      Grounds  House Public Works and Transportation Committee. Hearing on H.R. 881:
      The Ban on Smoking in Federal Buildings Act. March 11.

International Agency for Research on Cancer (IARC). 1986. IARC Monographs on the
      Evaluation of the Carcinogenic Risk of Chemicals to Man.  Vol. 38. Tobacco Smoking.
      World Health Organization. Lyon, France.  As reported in EPA 1992.

Jackson, Susan E  et  al 1989  Study Indicates Smoking Cessation Improves Workplace
      Absenteeism  Rate  Occupational Health and Safety. December.


                                       R-4

-------
Kaiser, Harvey H. 1984. Crumbling Academe: Solving the Capital Renewal andReplacement
      Dilemma. Association of the Governing Boards of Universities and Colleges.
      Washington, DC.

Keeler, T.E. etal.  1993. Taxation, Regulation, and Addiction: A Demand Function for
      Cigarettes Based on Time-Series Evidence.  Journal of Health Economics. Vol. 12,
      pp. 1-18.

Kelliher, Eileen V. 1978. Fewer Workers Now Are Singing Smoke Gets in Your Eyes. Wall
      Street Journal. November 7,1978.

Kristein, Marvin M. 1983.  How Much Can Business Expect to Profit from Smoking
      Cessation? Preventive Medicine. Vol. 12, pp. 358-381.

Ledger, Laura. 1994. Personal conversation between Jennifer Jones of SocioTechnical
      Research Applications, Inc. and Laura Ledger, Logical Concepts (a computer repair
      and maintenance firm), Washington, DC. March.

Lee, P.N. ct al. 1986.  Relationship of Passive Smoking to Risk of Lung Cancer and Other
      Smoking-associated Diseases.  Br. J. Cancer, Vol. 54, pp. 97-105.

Lewit, Eugene. 1993. Personal conversation between David Mudarri of EPA and Eugene
      Lewit, National Bureau of Economic Research, Palo Alto, CA. December.

Lewit, Eugene and Lewit, Samantha. 1994. Personal Communication Concerning the Cost of
      Worksite Smoking Policies.  The David and Lucille Packard Foundation. Los Altos, CA.
      January.

Lewit, Eugene, et al. 1992. The Response of Restaurants to New Jersey's Smoking Control Law.
      New Jersey Medicine. Vol 89. No. 6. July.

Lewit, Eugene, et al. 1993. Workplace Smoking Policies in New Jersey Businesses.
      American Journal of Public Health. Vol. 83. No. 2. February.

Liska, Roger W. 1988.  Means Facilities Maintenance Standards.  R. S. Means Company,
      Inc., Kingston, MA, p. 464.

Litai, Dan. 1980. A Risk Comparison Methodology for Assessment of Acceptable Risk.
      Massachusetts Institute of Technology. Ph.D. Dissertation. January. As cited in
      Unsworth (1992).

Macdonald, H. R. and Glantz, S.A. 1994.  Analysis of the Smoking and Tobacco Products,
      Statewide Regulation Initiative Statute (also known as the California Uniform
      Tobacco Control Act). Publication of the University of California, San Francisco,
      Institute for Health Policy Studies.

Manning, Willard G. etal. 1991. The Costs of Poor Health Habits. A Rand Study.
      Harvard University Press. Cambridge, Massachusetts. London England.
                                       R-5

-------
Marion Merril Dow Inc.  1993. Solutions for Workplace Smoking.  Evaluating Costs and
      Benefits. Published by On Target Media Inc. Cincinnati, Ohio.

Means Company Inc.  1990. Means Building Construction Cost Data 1991. Kingston, MA.

Means Company, Inc. 1990.  Means Square Foot Costs 1991.  Kingston, MA.

Miller, Alison L. 1993. The U.S. Smoking-Material Fire Problem Through 1991: The Role
      of Lighted Tobacco Products in Fire. Fire Analysis and Research Division. National Fire
      Protection Association. Quincy, MA. October.

Miller, Ted R. 1990. The Plausible Range for the Value of Life - Red Herrings Among the
      Mackerel. Journal of Forensic Economics. Vol 3. No. 3. pp 17-39. As cited in Unsworth
      (1992).

Moore, Michael J. et al.  1988. The Quantity Adjusted Value of Life. Economic Inquiry.
      Vol. XXVI, No. 3, pp. 369-388.

Moore, Michael J. et al.  1990. Discounting Environmental Health Risks: New Evidence
      and Policy Implications. Journal of Environmental Economics and Management.
      Vol. 18, pp. S-51 - S-62.

Nathan, F. 1987. Analyzing  Employer's Cost for Wages, Salaries, and Benefits.
      Monthly Labor Review, October, 1987.

National Institute of Occupational Safety and Health (NIOSH). 1991. Environmental
      Tobacco Smoke in the Workplace: Lung Cancer and other Health Effects. Current
      Intelligence Bulletin 54. U.S. Department of Health and Human Services.  NIOSH.
      Cincinnati, Ohio. As reported in EPA0992).

National Research Council (NRC). 1986. Environmental Tobacco Smoke: Measuring
      Exposures and Assessing Health Effects. National Academy Press. Washington, D.C.

National Association of Attorneys General (NAAG).  1993. Fast Food, Growing Children
      and Passive Smoke: A Dangerous Menu. Report distributed by the Minnesota Attorney
      General's Office.

Neely, Edgar S. et al.  1991. Maintenance Task Data Base for Buildings: Heating,
      Ventilating, and Air Conditioning (HVAC) Systems. U.S. Army Corps of Engineers,
      Construction Engineering Research Laboratory. May.

Neumann, James E., Mark T.  Dickie, and Robert E. Unsworth. 1994.  Industrial Economics,
      Incorporated. Linkage Between Health Effects Estimation and Morbidity Valuation
      in the Section 812 Analysis - Draft Valuation Document. Memorandum to Jim
      DeMocker, Office of Air and Radiation, U.S. Environmental Protection Agency. March
      31.

Office of Technology Assessment (OTA).  1985. Smoking-Related Deaths and Financial
      Costs. Staff Memo. Washington, D.C.
                                      R-6

-------
Office of Technology Assessment (OTA). 1993.  Statement of Clyde Behney and Dr. Maria
       Hewitt On Smoking-Related Deaths and Financial Costs: Office of Technology
       Assessment Estimates for 1990 Before the House Committee on Ways and Means.
       Washington, D.C.

Petersen, Lyle R. etal. 1988. Employee Smoking Behavior Changes and Attitudes
       Following a Restrictive Policy on Worksite Smoking in a Large Company. Public Health
       Reports. Vol. 103. No. 2. March-April.

Poynter, Jim W. 1993. Marketing Brochure for Take Ten: Environmental Breakrooms Inc. Fort
       Worth, Texas.

Ray, Dale R. etal. 1993.  Societal Costs of Cigarette Fires. U.S. Consumer Product Safety
       Commission and the National Public Services Research Institute. August.

Repace, J.L. and Lowrey, A.M.  1985. A Quantitative Estimate of Nonsmokers' Lung Cancer
       Risk from Passive Smoking. Environ. Int. Vol. 11, pp . 3-22.

Rice, Dorothy P. etal. 1986. The Economic Costs of  the Health Effects of Smoking, 1984.
       The MUbank Quarterly, Vol 64. No. 4.

Rigotti, Nancy A.  etal.  1991.  No-Smoking Laws in the United States. An Analysis of State
       and City Actions to Limit Smoking in Public Places and Workplaces. Journal of the
       American Medical Association. Vol. 266. No. 22. December 1.

Rigotti, Nancy A.  1992.  Workplace Compliance with  a No-Smoking Law: A Randomized
       Community Intervention Trial.  American Journal of Public Health. Vol. 82. No. 2.
       February.

Russell, M.A. H. etal. 1986. Use of Urinary Nicotine Concentrations to Estimate Exposure
       and Mortality from Passive Smoking in Non-Smokers. Br. J. Addict. Vol. 81, pp.
       275-281.

Samuels, B. and Glantz S. 1991. The Politics of Local Tobacco Control. Journal of the
       American Medical Association. Vol. 266. No.  15. October 16.

Sorensen G. et al 1991. Effects of a Worksite Nonsmoking Policy: Evidence of Increased
       Cessation.  American Journal of Public Health. Vol. 81, No. 2, February.

Sorensen, Glorian and Pechacek, Terry F.  1989. Implementing Nonsmoking Policies in the
       Private Sector and Assessing Their Effects. New York State Journal of Medicine. Vol.
       89. January.

Sorensen, Glorian. etal.  1986. Occupational and Worksite Norms and Attitudes about
       Smoking Cessation.  American Journal of Public Health. Vol. 76, No. 5, May.

Sorensen, Glorian et al.  1991. Work-Site Smoking Policies in Small Businesses. Journal of
       Occupational Medicine  Vol. 33, No. 9, September.

Sorensen, G. et al 1992.  Compliance with Worksite Nonsmoking Policies: Baseline Results
       from the COMMIT Study of Worksites. November/December.


                                      R-7

-------
Sorensen, G.  etal.  1993. Promoting Smoking Cessation at the Workplace: Results of a
      Randomized Controlled Intervention Study.

Spitzer, W. O. et al.  1990. Links Between Passive Smoking and Disease:  A Best Evidence
      Synthesis. A Report of the Working Group on Passive Smoking. Clin. Invest. Med. Vol.
      13. pp 17T42. As reported in EPA (1992).

Stave, G.M. and Jackson, G.W. 1991. Effect of a Total Work-site Smoking Ban on
      Employee Smoking Attitudes. Journal of Occupational Medicine. Vol 33. No. 8. pp
      884-90.
Steenland,K.  1992.  Passive Smoking and the Risk of Heart Disease. JAMA.  Vol.267.
      pp. 94-99.

Stillman, Frances A.  etal.  1990. Ending Smoking at The Johns Hopkins Medical
      Institutions: An Evaluation of Smoking Prevalence and Indoor Air Pollution. JAMA, Vol
      264. No. 12. September 26.

Svendsen, K. H. etal.  1985. Effect of Passive Smoking in the Multiple Risk Factor
      Intervention Trial. American Heart Association 58th Scientific Sessions.

Svendsen, K.H.  etal.  1987.  Effects of Passive Smoking in the Multiple Risk Factor
      Intervention Trial.  Am J. Epidemiol.  Vol. 126,  pp. 783-795.

Swart, J. Carroll.  1990. An Overlooked Cost of Employee Smoking. Personnel, August 1990.

Taylor, A.E. et al. 1992. Environmental Tobacco Smoke and Cardiovascular Disease: A
      Position Paper from the Council on Cardiopulmonary and Critical Care, American
      Heart Association.  Circulation.  Vol. 86, pp 699-702.

The Tobacco Institute (TI). 1993.  Tobacco Industry Profile. Washington, D.C.

Uns worth, Robert, etal. 1993. Review of Existing Value of Life Estimates; Valuation
      Document. A Memorandum from Bob Unsworth, Jim Neumann, and W. Eric Browne of
      Industrial Economics Incorporated to Jim DeMocker, Office of Air and Radiation,  U.S.
      Environmental Protection Agency. November 6.

Unsworth, Robert E. and Neumann, James E. 1993a. Industrial Economics, Incorporated.
      Review of Existing Value of Morbidity Avoidance Estimates:  Draft Valuation
      Document. Memorandum to Jim DeMocker, Office of Air and Radiation, U.S.
      Environmental Protection Agency.  September 30.

U.S. Department of Commerce. 1993.  Statistical Abstract of the United States 1993.
      Economics and Statistics Administration, Bureau of the Census. Washington, DC.

U. S. Department of Energy (DOE).  1991.  Energy Information Administration.
      Commercial Buildings Characteristics 1989.  DOE/EIA-0246(89). Distribution Category
      UC-98. June.

Van Houtven, G  L  and Cropper, M. L.  1994. When Is a Life Too Costly to Save? The
      Evidence from Environmental Regulations. Resources. Winter, No. 114, pp. 6-10.


                                      R-8

-------
Viscusi, W. Kip. 1988. Altruistic and Private Valuations of Risk Reduction.  Journal of Policy
       Analysis and Management. Vol. 7, No. 2, pp. 227-245.

Viscusi, W. Kip. 1988. Rates of Time Preference and Valuations of the Duration of Life.
       Journal of Public Economics, Vol. 38, pp. 219-327.

Viscusi, W. Kip. 1990. Do Smokers Underestimate Risks? Journal of Political Economy.
       Vol. 98, No. 6, pp. 1253-1269.

Viscusi, W. Kip. 1990. Utility Functions That Depend on Health Status: Estimates and
       Economic Implications.  American Economic Review. Vol.  80, No. 3,  pp. 3553-374.

Viscusi, W. Kip.  1991. Age Variation in Risk Perceptions and Smoking Decisions. The Review
       of Economics and Statistics. Vol. LXXIII, No. 4.

Viscusi, W. Kip. 1992. Fatal Tradeoffs: Public and Private Responsibilities for Risk. Oxford
       University Press. New York. As cited in Unsworth (1992).

Vutuc, C. 1984. Quantitative Aspects of Passive Smoking and Lung Cancer.  Prev. Med.
       Vol. 13, pp. 698-704.

Weiss, William L.  1981. No ifs, Ands, or Butts: Why Workplace Smoking Should Be
       Banned. Management World, September.

Weiss, William L., and Bruce W. Miller. 1985. The Smoke-free Workplace. Prometheus Books.
       Buffalo, New York.

Weiss, William L.  1991  Profits Up in Smoke.  Personnel Journal.  March 1981.

Wasserman, Jeffrey,  et al. 1991. The Effects of Excise Taxes and Regulations on Cigarette
       Smoking. Journal of Health Economics. Vol 10. pp 43-64.

Wells, A. J. 1988.  An Estimate of Adult Mortality in the United States from Passive
       Smoking. Environ. Int.  Vol. 14, pp. 249-265.

Wigle, D. T. etal.  1987. Deaths in Canada from Lung Cancer Due to Involuntary Smoking.
       J. Can.  Med Assoc. Vol. 136, pp.  945-951.

Woodruff, T. J  et al   1993. Lower Levels of Cigarette Consumption Found in Smoke-free
       Workplaces in California.  Archives of Internal Medicine. Vol. 153. No. 12. pp 1485-93.
       June 28.

Zeckhauser, Richard J. 1990.  Risk Within Reason. Science, Vol. 248, No. 4955.
                                       R-9

-------
Exhibit  1-1:  Policy  Development and Implementation  Costs  (1000 Employees)
    Baae=No Restrictions
Initial Cent
                 Policy Development
                 Managerial Personnel
                 Legal Personnel
                 Administrative Personnel
                 Total 12]

                 Policy Distribution
                 Printing
                 Administrative Personnel
                 Tola!

                 Policy Implementation
                 No Smoking Signs |.1|
                 Maintenance Personnel
                 Total

                 Outdoor Receptacles  |4]
                  Maintenance Personnel
                 Total

                 Smoking Cessation [5]
                 Total Initial Cost
Units
hours
hours
hours
pages
hours
signs
hours
receptacle
hours
participants

Cost/Unit [1]
20 00
21 00
12 00
005
12 00
2500
1600
13000
16 00
75 00

Number ol Unit*
Low High
5 10
2 8
15 25
1.000 2.000
4 8
20 30
4 6
5 10
3 6
38 50

Cost
Low (S) High ($)
100 200
42 168
180 300
322 eea
50 100
48 96
• 8 106
500 750
64 96
564 846
650 1 .300
40 96
600 1.398
2,813 3.750
4,487 6.856
Annual Cost
                 Policy Maintenance
                 Compliance
                                   Managerial
                                   Administrative
                 Other
                                   Managerial
                                   Other
                 Maintenance Personnel


                 Total Annual Cost
hours
hours

hours
hours

20
12
20
12
16

10 30
15 100
3 6
5 10
3 6

200 600
180 1,200
60 120
60 120
52 96
552 2,136
                  1. Unit labor costs are approximated using BLS Median Weekly Earnings Inflated by 24% to account lor fringe benefits  Maintenance labor hours are
                  estimated using Means Building Coot Data and the Engineered Performance Standards, Janitorial Handbook
                  2 Five responses to limited survey suggest a cost range ol $50 to $200. median = $100  Size of firms In whole survey ranged from 30 to 1800 employees:
                  median =240  and mean = 512  (Lewit. 1994)
                  3 No smoking signs in Grainger.1992 are $10.00. The $25 figure is from Lewrt, 1994. who also suggests a median cost of about $300 based on company
                  responses
                  4. The cost ol outdoor reeeplicals is from Grainger 1992.  However. Lewit (1994) suggests that outdoor recepticals at entrances cost $25 each, with total
                  costs for firms ranging from S25 to $1200
                  5 Assumes 25% ol employees are smokers, and that 10% (low) and 20% (high) will participate in such programs directly as a result of intituling smoking
                  restnctions. but that this will be a one lime increase in participation.

-------
exhibit 1-2: Cost of Implementing Smoking Bans
   Rase=No Restrictions
Low Estimate
High Estimate
             Initial Cost
Annual Policy Maintenance
                 Total

             Initial Cost
      Policy Maintenance
10% with Outdoor Shelter
                 Total
Cost per
1000 Emp.
$4.487
$552

$6.856
$2.136


Employees
(millions)
110
110

110
110


Total Cost
(million)
494
61

754
235


Recurrent
Portion
74


113



Amortized
Portion [1]
25


38



Total
Annual
99
61
159
151
235
69
455
                                          1. Annualized capital cost without time limit is equivalent to borrowing funds and paying the Interest
                                          every year, but not the principal. For convenience, a single discount (Interest) rate of 5% Is used for
                                          these calculations.
                                          2. Figure is for 5% discount (interest) rate (see Exhibit 1-4)
Exhibit 1-2a: National Cost of Indoor Lounges
   Base=No Restrictions
                                          Total Annual Cost
                           All with Lounges

                            10% w Lounges
                            20% w Lounges
3%
Low Estimate High Estimate
($ million) ($ million)
3.509 4.562
351
912
5%
Low Estimate High Estimate
(S million) ($ million)
3575 4.648
358
930
7%
Low Estimate High Estimate
($ million) (S million)
3641 4733
364
947
Exhibit 1-3:  Smoking Lounge Design (100 smokers)
               Lounge Density (ASHRAE. 1989)
                   Smokers Served by Lounge
                                Time Frame
                           Smokers per Hour
                       Break time per smoker
                  Expected Lounge Occupancy
                Construction Requirements per
                   Smoking Occupant Served
Average

100 Smokers
2 hours
50 smokers
12 minutes
10 smokers

Peak Square Feet Per
Lounge Occup.
200




15 smokers
2

-------
Exhibit 1-4:  Cost of Building Smoking Lounges
    Base=No Restrictions
Smokers
Smoking Occupants
Occupants serviced
Indoor Lounges
 3% Discount
 5% Discount
 7% Discount
Outdoor Lounges
 3% Discount
 5% Discount
 7% Discount
                                                                                                                        Annual Co«t«
                                                                                                                                                Total Annual Cost
Persons Square Feet per Initial Cost
(million) Occupant per Square Fool
46
55
55
55 2 30


5.50 2 25


Total
Cost
($ million)



3300


275


Recurrent
Portion
(20%)



660


55


Amortized
Portion



99
165
231
a
14
19
Annualteed
Initial cos)
(S million)



759
825
891
63
69
74
Cost per Annual Cost
Sq. Ft
(J million)



25 2750





Low Estimate
(S million)



3509
3575
3641
63
69
74
High Est (1)
(S million)



4562
4648
4733
127
138
149
                    1  High estimate Is 30% higher than low estimate (see text) tor Indoor lounges, and 100% higher lor outdoor lounges
                    based on LewH (1994)
Exhibit 1-5: Total National Implementation (with Smoking Lounge) and Enforcement Costs
    Base=No Restrictions
                                3%                                     5%
7%
   Implementation (with
      Smoking Lounge)
          Enforce menl
               Total
Low Estimate High Estimate
51O 1,367
100 500
610 1.867


Low Estimate Hlqh Estimate
517 1.384
100 500
617 1.884


Low Estimate High Estimate
524 1.401
100 500
624 » 1.901

-------
        Fihlhll  7-1n   Estimate*  of  U S  Nonsmoker  Annual  Mortality  Associated  With
                                Exposure  to  Olher  People's  Smoke
           MORTALITY



  I imrj Canrnr (ICO IP? 1R


   I lome t FS sources


   Other F.TS source!


  Olhcr Cancers


  Hearl Disease  (410-414)
  Burn Deaths


  Spontaneous Abortions

  Sudden Infant Death Syndrome

  Respiratory Conditions, newborn
  (769-780)

  Short Gestation. Low  Birthwetght
  (765)
 US   EPA'.«




.1.000 Tnl.il


 BOO


2.200
CENTERS FOR
   DISEASE
  CONTROL'

   3.8001
                                                                                    OTHERS
                                                                                                          COMMENTS
1 ?'. 240 to 20005     ETS a Group A carcinogen
                     ETS concentrations similar
300*. 30007, 5000'    in smoking homes and
                     offices   Generally higher
4000*               in restaurants
                       1.300'*




                        700

                       2.000


                        900
                     11.000-12.000*'<>


                     32.000-
                     40.000' I0 "


                     1200". ISO1"


                     145,000'«

                     1.900"

                     4.400"-'


                     4,400".«
                     Limited evidence lor
                     cancers other than  lung

                     Evidence continues to
                     mount on ETS and  heart
                     di sense

                     Due lo fires initiated  by
                     smoking materials
                     Estimates are based on
                     maternal smoking
•EPA1 evaluated only the respiratory hazards of ETS. also, was the only source to breakdown home vs nonhome nsks
"Deaths to children under age 18
CEPA' concluded that maternal smoking is a strong risk factor for SIDS   ETS exposure to the newborn is also considered to be
 a nsk factor for SIDS
'Defined by DiFranza as pennatal deaths, which includes stillborns

References
1       U S  EPA (1992) Respiratory Health Effects of Passive
        Smoking  Lung Cancer and Other Disorders   EPA/600/6-90/006F
2       Centers for Disease  Control (1991)   Smoking Attributable
        Mortality and Years of Potential Life Lost - U S  1988   MMWR 40 62-71
3       Modified by CDC from National Research Council (1986)
        Environmental  Tobacco Smoke 'Measuring Exposures and assessing health effects   Washington, D C  Academy Press
4       Arundel  (1987)
5       Vutuc (1984)
6       Wigle (1987)
7       Wells (1988)
8       Repace and Lowry (1985)
9       Russet et al (1986)
10     Glantz. S and Parmley (1991)   Passive Smoking and Heart
        Osease  Epidemiology.  Physiology and Biochemistry  Circulation 83 1-12
11      Steenland. K (1992)  Passive Smoking and the Risk of Heart
        Disease  JAMA 267 94-99
12     Adapted by CDC from Federal Emergency'Management Agency. 1990
13     Miller. AL (1993)  The U S smokmg-matenal lire problem
        through 1990  The role  of lighted tobacco products in fire   National Fire Protection Association. Ouincy. Mass. March 1993
14     DiFranza. JR  (1993)  Tobacco Abuse  Morbidity and
        Mortality in the Pediatric  Population  due to the Use ol Tobacco Products by Other People  Submitted to JAMA

-------
       Exhibit   2-1 b-  Estimates  of  ETS-Attrlbutable  Morbidity  In  Children  Due  to Horn*  and
                               Nonhome  Sources
              MORBIDITY"

Low Birth Woight (i.2500g)
Admission to Neonal.il  Intensive Care Units
Operations on Tonsils or Adenoids
Tympanolomy Operations
Episodes ol Otitis Media
Asthma Exacerbation
Asthma Induction
Physician Visits for Cough
Lower  Respiratory Tract Infections
(Pneumonia. Bronchitis. Bronchiolitis)
Fire-Related Injuries
                                                                 HOME
   U S   EPA1
300.000 -  700.000
 12.000  - 40.000"

135.000 -  270.0001
    DIFranza"
  59.000"
  25.000° c
  27.000"
  139.000
2.366.000
  536.000'

2.176.00011
885.000 -  1.138.0001

    359"
                                                         NONHOME
   30.000*
    160.000*
  2,800.000*
100.000 • 300.000«
1.000 - 5.000* x
  3.400.000*
 15.000 • 30.0009
      •Age < 18 years, unless notod otherwise
      "From  maternal smoking during pregnancy
      cDiFranza provides cost estimates of 302 m • 773 m S
      "Age < 15 years
      •As estimated by U S  EPA based on results from DiFranza'4
      'Physician visits
      SAs estimated by U S  EPA based on results from U S EPA*
      "Nonthreshold model. Z-10
      Under 18 months of age only
      IBronchitis in children under 18 years plus pneumonia in children under 5 years
      "From  all sources ol smoking materials

-------
RthlWt  2-1c:
•Recent  studies of heart disease among  ETS  exposed persons who never smoked
Study
Update of Gillis
cl al (1984)
by Hole el al
| 1989)1
1973-76
Humble el al
|1990]
aged 40+
Helsing el al
11988]
14.873 women,
aged 25+ in
1963
Svendsen el al
|198S. 1987] "
men aged 35-57
in 1973-82
Garland et al
|1985]
aged 50-79 in
1972-74
Hirayama
[1984]
aged 40+
Lee et al
11986]
Design
12-yr lollowup.
3.960 men and
4,037 women
aged 45-64 in
20-yr lollowup.
513 woman
12-yr lollowup,
4.162 men and
1963
7-yr average
(ollowup. II245
lO-yr (ollowup,
695 women
16-yr (ollowup.
91,340 women
48 cases. 182
controls
Exposure deflnlllonRelatlve risk Comment
Living with smoker
or ex-smoker in
early 1970s
Living with smoker
in 1960
Living with smoker
or ex-smoker in
observed)
Women 1 24
(Cl. 1 1-1 4. 1,539
observed)
Married to smoker
or ex-smoker
Married to smoker
or ex-smoker
Married to smoker
or ex-smoker
0 91- 1 33)
High exposure
1 31 (90% Cl.
1.06-1 93. 494
observed)
Married to smoker
or ex -smoker
201 (Cl. 1 21-335.Adjusted lor cardiovas-
485 observed) cular risk factors, §
posilive dose response
1 59 (Cl. 0 99-2 57) Adjusted (or cardiovas-
cular risk (actors, dose
response in some strata
Men 1 31 Adjusted lor education,
(Cl. 1 1-16. 492 positive dose response
among women only
1 61 (Cl. 096-271. Adjusted (or cardlovas-
90 observed) cular risk (actors.
positive dose response
2 9 (estimate.Adjusled (or age
19 observed)
Low exposure Significant dose
1.10 (90% Cl. response
Men 1 24No apparent dose
Women 093 response
' Confidence interval Is 95% unless otherwise indicated
I  Hole el al  [1989] provide updated results ol the same population studied by Gillis et al [1984]
§ Serum cholesterol, blood  pressure, and body mass index
**  Svendsen el al (1987) is the lull report of the abstract  published by Svendsen  et al  [1985]

As referenced in-  NIOSH  Current Intelligence Bulletin 54   June 1991

-------
Exhibit 2-2: Proportional Reduction In Mortality Ratio (PRMR) By Years Since ETS Exposure
Year* Quit:
< t
1 to 4
S to 0
1 to 10
10 to 14
15 to 19
10 to 20
21 +
Cancer
22 40
18 80
7 70

4 70
4 80

2 10
Cancer

16%
66%

79%
79%

91%
Heart Disease

66%
79%

91%
91%

100%
Overall

59%
77%

89%
89%

99%



68%


89%
100%
                                    1  Cancer mortality ratio lor male smokers (DHHS 1989)
                                    2  Heart disease mortality ratio assumed to decline twice as fast as the
                                    cancer mortality ratio.
                                    3. Average ot cancer and heart disease weighted by the average proportion
                                    of cancer and heart disease deaths between high and low estimates
Exhibit 2-3:  Percent Reduction Smoking Population and In Total Consumption due to Smoking Restrictions
                                    Reductions  From Quitting, Reduced Initiation, and a Reduced Consumption Rate of Smokers
   Base=No Restrictions
                                                                   Total Reduced
                                   Quitting & Reduced  Reduced Cons    Consumption
                                         Inllalion [1]	Rale [2]	(SO yr av)
                      Annual Average
                          Reduction
                        Low Estimate
                        High Estimate
424%
848%
958%
13.73%
1381%
22 20%
                                    1  Proportional reductions hi consumption due to quitting and reduced initihon is assumed lo be equivalent to the reductions In smokers due to
                                    quilling and reduced initiation.. Since the population changes are relatively constant over time from these combined effects, the results would
                                    not be affected greatly by alternative discount rales. Therefore, for convenience, an arithmetic annual average over all lime periods is used for
                                    the annual equivalent reduction over all discount rates.
                                    2  This Is the proportional reduction in cigarette consumption due to the reduced consumption rate of the smoking population remaining after
                                    quitting and reduced initiation is taken Into account

-------
Exhibit 2-4:   Premature Deaths Avoided from Reduced Exposure to Environmental Tobacco Smoke
    Base=No Restrictions
                                  Annual ETS Related Deaths
                   Major Illnesses
           Heart Disease Deaths |1|
                 Cancer Dealhs |2|
                             Total
50 Year Total Premature Deaths Avoided Estimates
Low Estimate
Home NonHome
3.240 8.760
800 2.200
4.040 10.960
High Estimate
Home NonHome
6.480
800
7. 280
Yearly Average for SO Year Period
17.520
2.200
19.720
Homo


7.818
156
Low Estimate
NonHome Total


450.430 458,248
9.009 9.165
Home


28.176
564
High Estimate
NonHome


810.445
16.209
Total


838.622
16.772
                                  1  Heart disease death rates lor ETS are conservatively adjusted Irom the literature text The estimates are allocated between home and nonhome In the same proportion as
                                  lung lung cancer
                                  2  Lung cancer lor home and nonhome exposures Is Irom EPA (1993)
                                  3  Home exposure effects result Irom decreases In tobacco use Irom quilting and reduced Initiation Reduction* In smoking due to decreased cigarette consumption by smokers
                                  b assumed to take place outside the home and are therefore not Included  The time delay In premature deaths avoided results by assuming that the reduction In the mortality
                                  ratio lor cancer over time tollows the same time pattern as the mortality ratio lor a smoker who quits.  The reduction over lime for heart dbease Is assumed to occur twice as
                                  last as tor cancer (see calculations In Exhibit 2-2)
                                  4  Impacts ol smoking restrictions are calculated to be 90% ol nonhome exposures (see text).
Exhibit 2-5:  Morbidity  Effects from Reductions In ETS Exposure
    BasesNo Restrictions
                                  Base Level (1990) Annual Incidence Rates
Morbidity Effects
 Tonsils and Adenoids Operations
 Tympanostomy Operations
 Ea> Infection Episodes
 Asthma Exacerbation
 Asthma Induction
 Physicians Visits lor Cough
Lower Respiratory Tract Infections
Estimated Annual Reductions
Low Estimate
Home NonHome



300.000
12.000
2.176.000
135.000
30.000
160.000
2.800.000
100.000
1.000
3.400.000
15.000
High Estimate
Home NonHome



700.000
40.000
2.176.000
270.000
30.000
160,000
2.800.000
300.000
5.000
3.400.000
30.000
Home [1]



12.714
509
92.217
5.721
Low Estimate
NonHome [2]
27,000
144,000
2.520,000
90.000
900
3.060.000
13,500
Total
27,000
144,000
2,520,000
102.714
1,409
3.152,217
19,221
Home 11]



59.331
3.390
184.434
22,885
High Estimate
NonHome [2]
27.000
144.000
2.520.000
270.000
4.500
3,060.000
27.000
Total
27,000
144.000
2,520,000-
329.331
7.890
3,244,434
49,885
                                  1.  Estimates based on reduction in cigarette consumption due to smokers quitting, and reduced initiation of new smokers. See Exhibit 2-
                                  3  Reductions due to reduced consumption of smokers are not included because these are assumed to take place out of the home.
                                  Reductions are assumed to be immediate, without time delay
                                  2  90% reduction (see text)

-------
Exhibit 2-6:  Annual Benefits from  ETS Related Premature Deaths Avoided.
    Base=No Restrictions
                                Tola! Valua [1]
                    Discount Rate
                             3%
                             5%
                             7%
Home
726
689
662.
Low Estimate
N on Horns
41.856
39.6B1
38.118
Total
Home
42.582 2.618
40.370 2.482
38.780 2.384
High Estimate
N onH onto
75.310
71.398
68,585
Total
77,928
73,880
70,970
                                 1  A willingness to pay estimate of $4 8 million per premature death avoided is used. See text lor meaning ol willingness to
                                 pay See Appendix lor discussion ol how we arrived at a value ol $4 8 million per premature death avoided
Exhibit 2-7:  Annual Benefits from Reduced Morbidity Effects of ETS
    Base=No Restrictions
Morbidity Estimate
 Tonsils and Adenoids Operations
 Tympanostomy Operations
 Ear Infection Episodes
 Asthma Exacerbation
 Asthma Induction
 Physicians Visits lor Cough
Lower Respiratory Tract Infections

  Total Annual Savings
                                                                                                        Low Estimate
                                                                                                                                                                High Estimate
Medical Cost
Per Episode [1]
1.500
1.500
75
10
100
SO
100

Total Coat
POT Case [2]
1.500
1.500
75
32 (3)
1.500,000 [4]
50
100

Annual Reduction
27.000
144.000
2.520.000
102.714
1.409
3.152.217
19.221

Ann Medical
Savings |5|
(million)
41
216
189
1
0
158
2
606
Total Annual
Savings [S]
(million)
41
216
189
3
2,113
158
2
2.721
Annual Reduction
27.000
144.000
2.520.000
329.331
3.945
3.244.434
49.885

Annual Medical
Savings [5]
(million)
41
216
189
3
0
162
5
616
Total Annual
Savlngi [5]
(million)
41
216
189
1 1
5.918
162
5
6.541
                                    1.  Guestimates based on professional judgement
                                    2.  Likely to be higher than medical cost, but data to support a higher estimate was available only where indicated
                                    3  Midrange estimates ol willingness to pay to avoid a day ol episodic asthma symptoms (Unsworth. 1993a )
                                    4  Midrange estimate ol  willingness to  pay to avoid having a case ol chronic bronchitis (Unsworlh. 1994)  Since asthma is more Die threatening than chronic bronchitis, it is
                                    assumed that this is a useful lower bound eatimate lor asthma
                                    5. These savings are assumed to occur immediately There is therefore no discounting
                                    6.  The high range estimate in Exhibit 2-1 b is reduced by 50% to account lor the uncertainty in the estimate.

-------
         3-1;  unit costs for Housekeeping and Maintenance
Annual Cost

Task by building


Housekeeping:
Empty and damp wipe ashtrays
Dusting Desktops
High Dusting
Venetian/Horizontal Blinds
Clean HVAC Vents
Empty and damp wipe ashtrays (per seat for smokers)
Sweeping/Vacuuming
General Cleaning for a Smoking Room (Lodging)
General Cleaning for a Non Smoking Room (Lodging)
Empty and damp wipe ashtray stands
Empty and damp wipe ashtrays (per hospital bed for smok>
Sweeping (per hospital bed for smokers)
Malntenance/Repalr/Replacement:
Replace Office Furniture
Carpet Repairs
Computer Maintenance (per computer for smokers)
Computer Maintenance (per computer for nonsmokers)
Duration
(minutes)
Ml


2.5
2.2
4.5
2
10
0.25
10.0
30
24
4
0.25
5.0



120
90
Cost Per
Hour
[2|


$8.39
$8.39
$8.39
$8.39
$8.39
$8.39
$8.39
$8.39
$8.39
$8.39
$8.39
$8.39



$85.00
$85.00
Computer Keyboard Replacement (per computer for smokers)
Painting
Replace Table and/or chair (Food Service, per seat)
Replace Furniture (Lodging, per room)
6800


$15.35


Cost Per
Task
[31
Ml X [2]

$0.35
$0.31
$0.63
$0.28
$1.40
$0.03
$1.40
$4.20
$3.36
$0.56
$0.03
$0.70

$4,530
$100
. $170
$128
$50.00
$1,739.79
$448
$2,125.00
Annual Frequency
Smoking
|4]


250
250
52
6
4
2190
78
292

292
730
547.5

0.2
1
0.5

0 67
0.2
0.2
0.2
No Smoking
[5]


0
52
12
1
1
0
52

292
0
0
365

0.14
0

0.5
0.5
0.2
0.14
0.14
Per 1 ,000 Square Feet
Smoking
[6]
[31 X [4]

$87.50
$77.50
$32.76
$1.68
$5.60
$65.70
$109.20
$1.226.40

$163.52
$21.90
$383.25

$906.00
$100.00
$85.00

$33.50
$347.96
$89.50
$425.00
No Smoking
[7]
[3] X [5]

$0 00
$16.12
$7.56
$0.28
$1.40
$0.00
$72.80

$981.12
$0.00
$0.00
$255.50

$634.20
$0.00

$63.75
$25.00
$347.96
$62.65
$297.50
|1] Source  Means Facility Maintenance Standards. BOMA Office Building Cleaning Operations in North America. DOA 1981
[2| Source  Average Hourly Wage Rate Plus Fringe. Bureau of Labor Statistics. Means Square Foot Costs. 1991
[4| and (5)  Source Vanous sources, see Appendix for full listing  For housekeeping. Dinegar 1994. Weiss 1985. Best Western 1994. Kelliher 1987.  For maintenance. Weiss  1985.
Ledger 1994 (computer maintenance and replacement)

-------
Exhibit 3-2: National Savings in Housekeeping and Maintenance Costs
Potential
Total Savings Per




Office
Housekeeping
Maintenance
Total Savings
Total Savfngs per Sq. Ft.
Mercantile & Service
Housekeeping
Maintenance
Total Savings
Total Savings per Sq. Ft.
Food Service
Housekeeping
Maintenance
Total Savings
Total Savings per Seating Capacity (smoking)
Health Care
Housekeeping
Maintenance
Total Savings
Total Savings per Sq. Ft.
Assembly
Housekeeping
Maintenance
Total Savings
Total Savings per Sq. Ft.
Education
Housekeeping
Maintenance
Total Savings
Total Savings per Sq. Ft.
Square
Feet
(million sq. ft )
Ml

1 1 .802
11,802



13.157
13.157



1.167
1,167

[5)

2.054
2.054



6.838
6.838



8,148
8.148


1,000 Sq. Fl.
Or Per Unit

[2]

$181.24
$547.03



$236.32
$204.39



$65.70
$123.84



$333.34
$502.28



$236.32
$204.39



$394.04
$502.28


Applicable
Sq. Ft.

(3]

7.081
7.081

;

3,158
3.158



700
700



507
507



821
621



600
600


Annual Savings

Low
(millions of
[4]

$1.283
$863
$2.146
$0.18

$746
$165
$911
$0.07

$438
$128
$565
$84.84

$228
$33
$261
$0.13

$194
$43
$237
$0.03

$160
$0 •
$160
$0.02

High
dollars)


$1.283
$3,793
$5,077
$0.43

$746
$481
$1,227
$0.09

$438
$306
$744
$111.69

$228
$222
$449
$0.22

$194
$125
$319
$0.05

$160
$301
$461
$0.06

-------
Exhibit 3-2: National Savings in Housekeeping
continued
and Maintenance

Costs
Potential
Total Savings Per




Lodging
Housekeeping
Maintenance
Total Savings
Total Savings par Guest Room (smoking) [ 6 ]
Warehouse/Industrial
Housekeeping
Maintenance
Total Savings
Total Savings per Sq. Ft.
Total Savings
Housekeeping
Maintenance
Total Savings
Total Savings per Sq. Ft.
Square 1
Feet
(million sq. It.)
[1)

3.476
3.476



12.253
12.253



58.895



,000 Sq. Ft. Applicable
Or Per Unit Sq. Ft.

[2] [3|

$373.03 342.6
$457.98 342.6



$305.14 7,351
$0.00 7.351



20.561



( 1 ) Total Squre Feet per building use Is from Department ol Energy. Energy Information AdminMratkm. Commercial Building Characteristics. 1989. p
[2] See Appendli for detailed calculations
(3) Proportion of Square Footage to report savings May vary by activity
computers. Swart 1090 for reported savings
(4) See Appendli for detailed calculations






Annual Savings

Low
(millions
[

$44
$49
$93
$73.56

$781
$0
$781
$0.06

$3.874
$1.280
$5.154
$0.09
age 17


High
ol dollars)
4]

$354
$391
$745
$589.84

$995
$0
$995
$0.08

$4.398
$5.620
$10.017
$0.17


See Kaiser 1984 for square feel In secondary education. Statistical Abstract tor number of personal








(5| Units for Food Service establishments are seating capacity for smokers
(B| Units for Lodging are square feel for common areas and per guesl room for smokers

-------
Exhibit 4-1:  Excess Absenteeism of Smokers and Former Smokers
                                  Smokers
                            Former Smokers
                             Never Smokers

                                  Quitting
                            Failure to Initiate
Annual Days
4 50
3 90
3 00


Excess Days
1.50
0.90



Days Saved



0.60
1.50
                                         1.  Quitters go from smoking to former smoking status
                                         2.  Those that fail to initiate smoking go from a potential
                                         smoker to a never smoker
Exhibit 4-2:  Value of Reduced Absenteeism
   Base=No Restrictions
     Quitting
 Fail to Initiate
Days Saved Per Unemplymnt Net
Person Per Year Factor
0 60
1 50
0 04
0 04
Days Saved Average Annual Value
Per Person Daily Earnings Per Person
0 576
1 44
104.00
104 00
59 90
149.76
Exhibit 4-3:  National Annual Savings from Reduced Absenteeism [1]
    Base=No Restrictions
                        3%
5%
7%
     Quitting
 Fail to Initiate
       Total
Low Estimate
millions
53
170
223
High Estimate
millions
107
340
447
Low Estimate
millions
67
121
187
High Estimate
millions
133
241
375
Low Estimate
millions
73
93
166
High Estimate
millions
147
186
333
            1.  Detailed discounting is necessary to separate out the differential effect of quitting and reduced
            initiation. See Appendix B for discount calculations.

-------
Exhibit 5-1:  Average Annual Fire Related  Injuries and Property  Damage (1988-1990)
       Base=No Restrictions
Injuries
 Fatal
 Non-Fatal
 Total

Prop Loss [1|

Total Cost
Rosidonti.il [1]
1.328
3.325
4.652
111.500

Non-Resid |1|
38
318
357
36.800

Unit Cost [3] Total Unit Cost
(million) (million)
4 8
0 17 017


Total Cost
Residential
(million)
6.373
551
6.924
316
7.239
Non-Resid
(million)
184
53
237
115
351
Total
(million)
6.557
603
7.160
430
7,591
              1  From Miller (1993)  Figures are an average ol 1988-1990  Figures lor 1991 are excluded because of distortion due to the Oakland fire storm
              2  Number of fires
              3  Average cost per Injury from Ray (1993)  Estimates Include medical costs, transport costs, lost earnings, legal and health Insurance administrative costs, and pain i
              suffering
              4  The unit cost for hospitalized injuries only Is $ 78 million (Ray, 1993)
              5  Total Value of each reduced life-related fatality Is assumed to be $4 8 million  See text
Exhibit 5-2:  Fire Related Premature Deaths, Injuries, and Property Losses Avoided
       Base=No Restrictions
                                           Low Estimate              	     High Estimate
Est. Reductions Over SO Yrs
Current Annual Average Infunes
Residential Non-Resid
1.328 38
3.325 318
4,652 357
Annual Reductions in Injuries
Residential [1] Non-Resid (21 Total
56 33 89
141 274 415
197 307 504
Annual Reductions in Injures
Residential |1] Non-Resid [2] Total
113 31 144
282 261 543
394 292 6S7
Total Residen and Non-Residen
Low High
4,462 7.198
20,733 27,141
25,195 34,339
 Injuries
 Fatal
 Non-Fatal

 Total
              1. Reductions are assumed to be proportional to reductions in the total consumption ol cigarettes due to quitting and reduced initiation  Since the
              reduction in consumption ol smokers likely takes place soley outside the home, these reductions are not included In the calculations
              2  Uses a 90% reduction tor the estimated portion ol the nonresidential environmnents that ban  smoking, and 50% reduction tor the estimated portion thai
              provide smoking lounges. For costing purposes, the proportion ol establishments with indoor lounges in the low estimate Is less than in Ihe high estimate
              Therefore, the low estimates lor tire related deaths and injuries avoided is higher than the high estimate because ol this oddity
 Exhibit 5-3:  Annual Benefits In Fire Related Injuries and Property Damage
        Base=No Restrictions
              Low Estimate                               High Estimate
Injuries
  Fatal
  Non-Fatal
  Total

Property Loss

Total Savings
Residential
million
270
23
293
13
307
NonResidential
million
158
45
204
99
302
Total
million
428
69
497
1 12
609
Residential
million
540
47
587
27
614
NonResidential
million
151
43
194
94
288
Total
million
691
90
781
121
902

-------
Exhibit 6-1:   Estimating the Effect of Smoking Restrictions on Quit Rates,
                     Consumption Rates, and Rates of Initiation
   Base=No Restrictions
Quit











Site Conditions Reference Quit Rate
Reported
(Annual)
N-B Baile. el al(1991) 15%
Hudzmski. el al(1990) 9%
Stave, el at (1991) 17%
Slillman. et al(1990) 15%
N-RorR-B Andrews (1983) 16%
Borland et at (1990) 9%
Gottlieb et al (1990) 13%
Sorensen el al (1993) 12%

Estimated Net Quit Rate due to workplace smoking policies
Estimated Net Quit Rate due to Comprehensive Legislation
Assumed
Relapse
Rate
30%
30%
30%
30%
30%
30%
30%
30%


T21
Net Quit
Rate
10.50%
6.30%
11.90%
10.50%
11.20%
6.30%
9.10%
8.40%



Net Quit
Rate w/o
Smoke Restr.
2.50%
2.50%
7.50%
2.50%
2.50%
2.50%
2.50%
2.50%
Lew
4%
3%
Net Quit Rate
due to
Smoking Restr.
8.00%
3.80%
4.40%
8.00%
8.70%
3.80%
6.60%
5.90%
High
8%
6%
Consumption
Consumption
Reduction
N-B Slave el ta). (1991) 34%
Stillman. et al (1990) 20%
RB Borland el al. (1990) 18%
Hocking et al. (1991 20%
Estimated Reduction in Consumption Rate due to Workplace Restrictions
Estimated Reduction in Consumption Rate due to Comprehensive Legislation [2]
Low High
15% 20%
10% 15%
Initiation




Reduced Initiation
N-B Woodruff et al (1993) 36% [3]
R-B Wasserman et al.(1991 41% [4]

Estimated Reduction in Initiation Rate due to Comprehensive Legislation



Low [5]
5%



High [5]
10%
                1.  N-B refers to sites thai go from  no restrictions (N) to a ban (B)  R-B refers to sites that go from  partial restrictions (R) to a ban
                (B)
                2  Because only about 60% of the population is employed, comprehensive legislation would have less average effect on the whole
                population than the affect of workplace policies on employees.
                3.  Cross sectional analysis of California worksites
                4.  Not a workplace study The 41% reduction refers to the difference between teenagers who live In communities with legislation
                mandating few restnctnns In public places, compared with teenagers living in communities with comprehanslva legislation. Including
                legislation restricting smoking  in workplaces Most of the reduced consumption is attributed lo reduced initiation.
                5.  Estimate is both conservative and exceptionally uncertain because of the paucity of information

-------
Exhibit 6-2:  Proportional  Reduction in Mortality Ratio (PRMR) By Years Since Quitting
                               Ratio to Baae Mortality Rate

Age
0-34
35-44
45-54
55-64
65-74
7 Si-
Smoker Mortality
Ratio [1]
Base = 1 .00


3.02
2.92
2.67
1.85
Years Quit:
1 to 2 3 to 5



42% 43%
26% 30%
11% 26%
19% 19%
6 to 10



59%
45%
27%
17%
1 to 10 [2]

51%
51%
51%
36%
23%
18%
11 to 15

64%
64%
64%
55%
39%
2%
16 +

64%
64%
64%
61%
59%
32%
11 to 20 [3]

64%
64%
64%
58%
49%
17%
21 to 30 [4]

90%
90%
90%
90%
80%
70%
31 to 40 [4]

95%
95%
95%
95%
90%
85%
41 to 50 [4]

95%
95%
95%
95%
90%
85%
50 * [4]

100%
100%
100%
100%
100%
100%
              1.  Males only. Average of mortality rates for above and below 20 cigarettes per day.
              2.  Weighted average of 1-2. 3-5. and 6-10 years. Agas 30-44 assumed to be the same as 45-54.
              3.  Average of 11-15, and 16 + years.
              4.  Assumed to reach 90% average reduction after 20 years based on cancer rate mortality ratios (DHHS
              1989). and full reduction (100%) In 50 years with a slight lag for ages older than 65
              Source- DHHS (1990). Table 7 page 95.

-------
Enhihlt 6-3:  Premature Deaths Avoided (PDA) From Quitting by Years of Abstinence
   nnn In Deem* 11]
3%






61
609
2001-2010

5%
3%





1.026
10.872
2011-2020

5%
5%
1%




2 570
36.572
2021-2030

5%
5%
5%
3%



4.829
84.866
2031-2040

5%
5%
5%
5%
3%


10.567
1*0.539
2041-2050

5%
5%
5%
5%
5%
3%

17 789
368.426
2051 *

5%
5%
5%
5%
5%
5%

20,737

Yaarty Avenge tor Ihe SO Veer Period
PDA
Low En.
6%
8.039
89.091
16.849
48,348
44,214


190,639
3.611

Percent

3%
11%
19%
24%
93%


100%

PDA
High Eel
10%
10.076
118.1*2
71.1*9
90.691
•1.429


1*1.07*
7.122
             Wo assumeall new smokers coma from the youngest age group, that a constant number Is added every year, and that It takes 60 years tor the smoking population 10 completely change
             Therefore, It lakes 60 years lor ihe smoking population 10  be reduced by (he estimated reduction In the Initiation rate, wth 1/601 h of that reduction taking place each year
             2 Average rate over ihe llrsi 10 year Increment In which new smokers are added each year
              Note  EPA does not believe that discounting physical effects such as premature deaths or live years extended has any meaning  Only monetary
              values should be discounted  Discounting physical effects is done above only for analytic convenience and to display discounting methodology

-------
Exhibit 6-5:  Premature Deaths Avoided From Reduced Consumption
   Base-No Raatrlalona
      Yeara
                                              1091 10 2000
                                                                   2001 to 2010
                                                                                    2011  10  2020
                                                                                                    2021 10  1030
                                                                                                                     2011  le 1040
                                                                                                                                      2041 * beyond
                                                                                                                                                                   80 Taar Telala.
                                                                                                                                                                                                 Vein


AO«

0-34
IS. 44
49-94
55-84
69-74
75.
Tolal

1990 Adjusted lor
Deaths Doming a Reduced
Pec Year Initiation |1|
(Low Estmale)
2.215 2.121
13.291 31.880
28.901 27.677
58.510 SB. 030
160780 153968
131.051 125.497
414.741 397.171

% Raduden FFM1 PDA
ParVair
jow Estimate)
10% 51% 101
10% 51% 1,619
10% 51% 1.406
10% 36% 2.034
10% 23% 3.600
10% 18% 2 235
11.001

R=M» PDA
ParVaar

64% 135
64% 2 035
84% 1.766
58% 3 283
49% 7.525
17% 2.1SO
16.904

PRVfl PDA
ParVair

90% 191
90% 2 869
90% 2.491
90% S 043
80% 12.317
70% 8.785
31.898

FRNR PDA
ParVair

95% 202
95% 3.029
95% 2.629
95% 5.323
90% 13.857
85% 10.667
39.706

P*H PDA
ParVair

95% 202
95% 3 029
95% 2.629
95% 5.323
90% 13.657
85% 10.667
35.706

fflrVR PDA
Par Van

100% 212
100% 3.186
100% 2.768
100% 5.603
100% 15.397
100% 12.550
39.717
Yearly Average lor tht 50 Vtir Parted

Lima Saved Percent Lima Savad
Law Ea) High Eal
10% 2B%
(.170 0.84% 16.358
IIS, 803 9.60% 249,860
109.216 8.34% 211.449
209.890 18.02% 410.119
511.563 1909% 099.761
149.144 26.16% 874,918
1,110.146 10000% 2,960,496
28.201 91.209

Deaths
Agt
jow Estmale)
0-14
19-44
49-94
59-84
69-74
75.
Talal

           1  Th> reduced consumption nla applet only to amokara altar radueing tha currant unokng popifehon to account lor these that quit or tail to inmate imoking
           2  Tha maximum proportonal reduction n mortality la aqua) to the percent reduction in consumption, and a assumed to be reached in 50 years (PRM factor . 100%) Tha
           lima path ol PRM factor n aasumad 10 be tha same at lor qurnng

           Note  EPA does not believe that discounting physical effects such as premature deaths or live years extended has any meaning  Only monetary values should be discounted
           Discounting physical  effects is done above only for analytic convenience and to display discounting methodology

-------
         5-6- Life Expectancies of Ever Smokers and Never Smokers by Age
              Evnr Smokara
                                                                                            Never Smokers
                                                                                                                                                                       Difference
Vgp
35
45
55
65
75
85
riobnnlliry ol
Survival [11
1 000
0 975
0 916
0 782
0 548
0 >85
Probability ol
Deaths
0 025
0 084
0 218
0 452
0 815
Expected Lite Years
Remaining To Lite
Expect
34 06
24 31
15 15
7 33
1 85
To Age 65
26.73
16 98
7 82
Probability ol
Survival (11
1 000
0 987
0 957
0 884
0 725
0 395
Probability ol
Deaths
0 013
0 043
0 116
0 275
0 605
Expected Lite Years
Remaining to Life
Expect
39 48
29 61
20 04
11.20
3 95
To Aqe 65
28 28
18.41
8 84
Exp Life Years
Ever Minus Never
5
5
5
4
2
              1   Survival probabilities from Hodgson (1992)

Exhibit 6-7: Years of Life Lost per Smoking Related Death by Age
                                                                                                              Lite Years Lost Per Death
                                                                                                                                                    LHe Years Lost Per Death
Age
35-44
45-54
55-64
65-74
74-85
Total
Excess Probability
ol Death
(End ol Interval)
0 012
0 041
0 102
0 177
0 210
Excess Probabll
Ol Death
(Within lnterval)[1]
0 009
0 034
0 087
0 158
0 202
Ever Smokers
In 1990
17 29
13 80
13 80
14 00
0 60
59 49
Expected
Smoking Related
Deaths/year [2]
(thousands)
15 56
46 58
119 72
221 55
12 10
415 51
Percent
Dlscountei
3 75%
11 21%
2881%
5332%
291%
100 00%
Average Lite Years Lost per Death [31
To Die Expect
(Within Interval)! 1]
1 Years at 3% [4] [51
20 50
1605
10 75
4 58
1 34
8 15
To Age 65
(Within lnterval)[l|
17.10
11.75
5.30
3 48
To Lite Expect
(Within Interval)! 1)
Undlscounled Years
31 62
22 02
13.20
596
1 39
10 67
To Age 66
(Within Interval)! 1)
24 29
14 69
587
4 25
              1 Estimated as 75% el the difference between beginning and ending values
              2  Excess probability ol death limes the number ol ever smokers wtihln the age Interval
              3.  Average of all smoking related deaths ol all ages weighted by the percent ol deaths In each age group
              4  The discounted value ol future eipecled me yearn lost at lime of death Only a 3% discount rate Is used throughout the analysis.

              5  EPA does not believe thai discounting physical enacts such as premature deaths or live years emended has no meaning
              lor analytic convenience and to display discounting methodology
Only monetary values should be discounted  Discounting physical effects Is done here only
Exhibit 6-8:  Life Years Extended Per Premature Death Avoided by Type of Smoking Activity
Age
00-35
35-44
45-54
55-64
65-74
74-85
Total
Expected Life Years Remaining
To Life Expecl[1| To Age 65(1)
74 68
20 50
16 05
10 75
4.58
1 34
74.68
17.10
11.75
5 30
Percent Premature Deaths Avoided. 50 Year Period
Quitting Reduced Cons Reduced
2%
4%
12%
43%
40%
100%
1%
10%
8%
16%
39%
26%
100%
Av. Life Yean Extended per Premature Death Avoided
Average LHe Years Extended Over 50 Year Period [2)
To Lite Expectancy 4.74 7.65
To Age 65 1.38 3.95
Initial
3%
31%
19%
24%
23%
100%
15.06
10.81
              1.  Perinatal deaths  Expected life years remaining h> from OTA (1993)
              2  Average ol all age groups weighted by the percent of deaths In each age group

-------
Exhibit 6-9:  Excess Medical Costs per Smoking Related Premature Death
                         Male
                       Female
                   Both Sexes
Excess Med. Cost
5 Year Total
(million )
113.500
73.100
186.600
Adjustment
Factor
0.95
0.95
0 95
Annual Excess
Medical Cost
(million)
21.526
13.864
35.391
Annual Excess
Med. Cost Per
Prem. Death
(dollars)
85.174
                              1  Excess medical costs for the 1985 population ot ever smokers versus never
                              smokers in 1990 dollars  This figure accounts lor the exteded life expectancy of
                              never smokers and the medical  expenses incurred during those years.
                              2  Excess medical costs provided by Hodges are discounted by 3%. To obtain the
                              undiscounted value, we multiply by 1 09 To obtain the excess cost of a
                              'nonsmoking smoker', we multiply by 0 87 (see Hodges.1992)

                              Source  Hodges (1992)
Exhibit 6-10: Costs Per Smoking Related Premature Death and Life Years Lost
                                  Excess Cost per
                                 Premature Death

                                Cost per Life Year
                                  Lost to Age 65
Direct
Medical
(dollars)
85,174

Lost Earnings
Morbidity [1]
(dollars)
16.630

Lost Earnings
Mortality [2]
(dollars)

31.150
                                                1   Calculated from OTA. 1993
                                                2   Estimated daily earnings of smokers (see Exhibit 5-2) times 260 days
                                                times 1 2 to account tor earnings after 65

-------
Exhibit 6-11:  Annual Savings Due To Changes in Smoking Behavior
   Basa=No Restrictions
                                              Low Estimate
Savings from Smoking Restrictions
 3% Discount
   Quitting
   Reduced Consumption
   Reduced  Initiation
                 Total
 5% discount
   Quitting
   Reduced Consumption
   Reduced  Initiation
                 Total
 7% Discount
   Quitting
   Reduced Consumption
   Reduced  Initiation
                 Total
High Estimate
Direct
Medical [1]
(million)
343
2,221
513
3,077
387
1.838
161
2,386
387
1.589
67
2,044
Lost Earnings
Morbidity [1]
(million)
67
434
100
601
75
359
31
466
76
310
13
399
Lost Earnings
Mortality [1]
(million)
248
826
983
2.056
203
1.127
448
1,778
170
1.319
230
1,718
Direct
Medical [1]
(million)
686
4.443
1.026
6,155
773
3,676
322
4,771
774
3.179
135
4,088
Lost Earnings
Morbidity [1]
(million)
134
867
200
1,202
151
718
63
932
151
621
26
798
Lost Earnings
Mortality [1]
(million)
495
1,652
1.965
4,112
406
2.253
896
3.555
339
2.638
459
3,436
                              1  Estimates provided here only for those interested These are not included in evaluation of benefits.  See text

-------
Exhibit 7-1: Percent of Worksites with 50 or More Employees that Prohibit Smoking or
           Restrict Smoking to Separately Ventilated Areas
Size of Worksite
50 - 99
100 - 249
250 - 749
750 +
All Sites
Percent
55%
61%
66%
74%
59%
Exhibit 7-2: Number of States and Territories with Legislated Smoking Restrictions -1993
           Public Places
           Government Workplace
           Private Workplace
           Restaurants
           Bars
None
13
18
35
22
53
Designated
Areas Only
40
34
18
31
0
Designated
w/Separate
Ventilation
0
1
0
0
0
100% Smoke
Free
0
0
0
0
0

-------
Exhibit 7-3a: Proportion of All Employees Under Restrictive Smoking Policies

                                   Assumed % of Rrms with Restrictive Policies
           • Percent all Employees
            % Employees Covered by
            Ban or Lounge

             % Employees Covered by
             Smoking Ban
             % Employees Covered by Lou
             Assume 20%
            meet HR3434
            Standards
Firms w/more
than 50 Emp
59%
45%
59%
34%
25%
5%
Firms Under 50 Employees:
5% 10%
55% 55%
29% 32%
18% 21%
11% 11%
2% 2%
1 5% 25%
55% 55%
35% 40%
24% 29%
11% 11%
2% 2%
Exhibit 7-3b: Proportion of Employees with Smoking Bans and Lounges
                        Smoking Bans
              Complying Smoking Lounge

                     Total Compliance
Before
HR3434
21%
2%
23%
After
HR3434
90%
10%
100%

Low
90%
10%
100%

Hiqh
80%
20%
100%

-------
          S-1: Summary of Costs and Benefits*
       BXM a No Ffaitrlctlone
Cost of Implementing the Legislation
Smoking Bans
SmoWng Lounge
National Enforcement
Benefits from Reduced Exposure the ETS
Value ol Premature Deaths Avoided
Home Exposure
NonHome Eiposure
Improved Healih
Increased Occupant Comfort
Savings In Operating and Maintenance Expenses
Housekeeping
Maintenance
Net Change In Productivity
Savings In Reduced Smoker Absenteeism
Savings In Smoking Related Fires
Value of ln|uries and Deaths Avoided
Residential
NonResldemlal
Property Damage Avoided
Benefits Without Regard to Smoker* (2]
•—3*. Discount Rate""
Low Estimate' High Eatlmste
(Millions of Dollars)
610 1,867
159 455
351 912
100 500
45,303 84.46g
726 2.616
41.856 75.310
2.721 6.541
« *
S.1S4 10.018
3.874 4.398
1,280 5.620
• a
223 447
809 902
293 587
204 194
112 121
50,679 93,968


"~5% Discount Hate-
Low Estrnate High Estimate
(Millions ol Dollars)
817 1,884
159 455
358 930
100 500
• 1.091 80,421
689 2,462
39.681 71.398
2.721 6.541
t t
S.154 10,018
3.874 4.398
1.280 5.620
* •
187 375
809 902
293 587
204 194
112 121
48,425 89,831


"7% Discount Rate"
Low Estimate Hbjk Estimate
(Millions of Dollars) (Millions
624 1,901
159 455
364 947
100 500
41.501 77.511
662 2.384
36.118 88.565
2.721 6.541
• •
5,154 10.018
3.874 4.398
1.280 5,620
* *
166 333
609 902
293 587
204 194
112 121
46,807 86.862
Benefits or Losses Regarding Smokers
Annul Amrig* o»«r JO »••> Pirlotf
Law e«UmH« HlQh CrtmaM
5.449
26.203
3.811
3S.482
10.898
51.209
7.622 (3)
69.728
AMMl RM> After SO Tun
Low Estimate High Esllmste
0
39.717
20.737
80.455
0
77.620 [1]
41.475 [3]
119,095
   Premature Death* Avoided (Smokers)

            Quit Smoking
            Reduced Consumption
            Reduced Initiation
              Total

  Benefit Loeeee to Smokers

•Totals may appear to be greater than the sum ol Individual Items due to rounding
a  Not quantified  See teit lor discussion.
i  Most ol this estimate Is due to the estimated value of reduced asthma Induction In children
2  Considers just the above costs and benlHs
3  Annual premature deaths avoided alter 60 years. Annual reduction In premature deaths gradually Increase* over the first 60 years before II reaches a constant value
                                                                                                                                                                                      Low Mirau

-------
Exhibit S-2:  Summary of Costs and Benefits*
              Rmlrlcllona
Cost of Implementing the Legislation
Smoking Bans
Smoking Lounge
Nitlon.il Enforcement
Barents from Reduced Exposure the ETS
Value of Premature Deaths Avoided
Home Exposure
Improved Health1
Increased Occupant Comfort
Savings In Operating and Maintenance Expenses
Housekeeping
Maintenance
Net Change In Productivity
Savings In Reduced Smoker Absenteeism
Savings In Smoking Related Rres
Value of Injuries and Deaths Avoided
Residential
Nonresident lal
Property DtirnHgtt Avoldod
Benefits Without Regard te Smokers (2]
•"•3% Discount Hale""
Low Estimate High Eallmsle
(Millions of Dollars)
470 1.437
123 350
270 703
77 385
34,884 65,041
559 2.018
32.229 57 988
2.095 5.037
3,969 7,714
2.983 3.386
986 4.327
. .
172 344
469 694
226 452
157 149
86 93
39.023 72,358






""5* Discount Rats—
Low Estlmste High Estlmats
(Millions of Dollars)
47» 1,451
123 350
275 718
77 385
33,180 81,924
530 1,911
30 555 54,978
2.095 5,037
3,969 7.714
2.983 3.388
986 4.327
. .
144 2(9
469 694
228 452
157 149
86 93
37.287 89.170








••7% Discount Rate"
Low Estimate High Estimate
(Millions of Dollars)
480 1,464
123 350
280 729
77 385
31.956 59,883
509 1.836
29.351 52.810
2.095 5.037
• *
3.969 7,714
2.983 3.388
986 4.327
I «
128 258
469 694
228 452
157 149
86 93
38.041 66.884
Benefits or Losses Regarding Smokers
    Premature Deaths Avoided (Smokers)

             Quit Smoking
             Reduced Consumption
             Reduced  Initiation
              Total

   Benefit or Losses to Smokers
Anmul Krtrtgm over SO
Lew EoMintte
4.196
20.176
2.934
27.306
roar Period
High EiSrMta
8.391
39.431
5.869 [3]
S3.8«1
Araillll RM M
Low Estimate
0
30.582
15 968
46,550
1m SO Tori
High Estlmats
0
59.768 (t)
31.938 (3)
91.703
• » • •
 "Totals may appear to be greater than  the sum of Individual hems due to rounding
 *  Not quantified   See hnl lor discussion
 1  Most ol this estimate Is due to the  estimated value of reduced asthma Induction In children  The high estimate In E«hlblt ES-1 Is reduced by 50% because of uncertainty of
 Its  magnitude
 before it reaches a constant value
 2  Considers just the above costs and  benllts
 3  Annual premature deaths avoided after 60 years Annual reduction In premature deaths gradually Increases over  the first 60 years

-------
     1  " P-3:  Analysis of Alternative  Baselines*







OO91 il Implafnantlng tha Laglalatlon
Banaflta from Raducad Eipoaura (ha ETS
Savtnga In Oparatlng and Malntananea Evpanaaa
N«i Cnanga In Productivity
Saving* In Raducad 3mohar Ab**nt*al«m
Savlngi In Smoking Ralatad Flra*
Mat Banaflla

Scenario 4M
Raw Baaallna
No Haatrlctlona
(1990 Clg Cona)

121
610
45.303
5.154
*
223
609
50.679

Scanarlo W2
Currant Baaallna
23% Raatrtctlona
(1990 Clg Cona)

131
470
34.884
3.969
»
1 72
469
39,023
Low E«tlmata« [1]
Scenario «
75X Rastrtctlona
In 10 Yaan
(iwo Clg Cona )

l«l
--(Million! ol Dollan)
209
15.521
1.766
»
77
209
17,363

Scanirlo M
Currant Baaallna
21% Haatrtcllona
Comln Cona Oael
10 Yaara
151
456
33.864
3.853
*
167
455
37,883

Scenario «5
Currant Baaaltn*
21% Haatrtctlona
Contln com Oacl.
20 Vaara
l«l
382
28,364
3.227
*
140
381
31,730
•Totals may appear to ba greater than the sum ol Individual Items due lo rounding.
1.  All estimates use 3% discount rate, and assume the same enforcement cost ot $100 million.
2.  This is the scenario used In the main text.
3.  The principal estimates In the tert lor assessing the effects ol H.R. 3434 are based on this scenario.
4.  Assumes no additional compliance after 10 years.
5.  Per capita consumption  has dedlned by about 3% per year from 1980 to 1990 (OHHS, 1994).  Assumes the rale ol decline will continue lor 10
years, and then level off.
8.  Assumes the rate ol decline In per capita consumption over the past  10 years will continue for the next 20 years and then  level off.
       \  «c
                                     Smoking Raatrlctlona
                                            Seanario 09: 75% FUatrtdlona In 10 Vaara
                        Scanarto *1: Raw Bwatlna
                                             10  It 12  13 14  15  16  1"  18  19  20

                                             Yaan
                                                                                                                                  Pir Capita Consumption of Cigarette*


-------
Exhibit S-4: Benefits Minus Costs
 Base=23% Restrictions

           Low Estimate

           High Estimate

           Low Benefits Minus High Costs
$ million
3% Disc. Rate 5% Disc, rate 7% Disc. Rate
39,023
72,356
38,056
37,287
69.170
36.311
36,041
66,884
35,057

-------
       APPENDIX A
Review of Selected Literature

-------
                                   Appendix A-l

                   Value of Avoiding the Risk of Premature Death

       The Environmental Protection Agency recently undertook a review of various
approaches to evaluating the the value that persons place on an incremental risk of death
(Unsworth, 1992), sometimes referred to as the value of a statistical life.  In general, the
studies attempt to determane people's willingness to pay to avoid an increase in the risk of
premture death. The following summarizes portions of that review.

       Methodological Issues

       There are three types of estimates that are commonly used. They are wage-risk
studies, contingent evaluation studies, and consumer behavior studies.  Wage-risk studies
estimate the additional compensation individuals demand in the labor market for taking
riskier jobs.  Contingent valuation studies ask individuals to state how much they would
pay to avoid additional increments of statistical mortality risk.  Finally, consumer behavior
studies examine market situations (e.g. smoke detectors) other than the labor market that
involve a risk-dollar tradeoff.

       Most studies reported in the literature apply a wage-risk framework. These studies
compare wage rates among different jobs involving different risks and estimate the amount
of additional compensation that is associated with the additional risk. Difficulties in these
studies include isolating job related risks from risks associated with lifestyle, and isolating
compensation due to job related risk from other job related factors that may account for
wage differentials. Wage-risk studies assume a perfect labor  market in which workers are
free to move between jobs and where wages respond readily to forces of supply and demand
for labor. The prevalence of unions and other institutional forces which move the labor
market away from a perfectly competitive state compromise  the validity of these studies.
Most wage-risk studies rely on wage data for manual labor and therefore may not be fully
representative of the population at large.

       The subject population may not be representative for other important reasons.
Individuals value risk differently. Some individuals are inherently more apt  to accept  risk
than others  The base level of risk in one's life may be a factor. It has been suggested, for
example, that individiials with  higher baseline risks tend to place a higher value to risk
reduction (Blomquist 1981).

       Age is another important factor. It is generally assumed that if one were to
differentially value saving the life of a young person compared with saving the life of an
elderly person, that the young person's life would be valued more highly. However, the
propensity to avoid mortality risk tends to increase with age.  That is, the elderly tend to
value opportunities to avoid risk more highly, and they therefore reveal a greater implicit
value of life  To avoid distortion, the age distribution of subjects in the study should
represent the population to which the value of life estimates are being used.

       All value of life studies involving the  market value of risk suffer from difficulties
encountered when participants in the study, or in the market being studied, perceive the
risks to be different than the true risks. If, as is sometimes the case, those accepting the risk

-------
as part of the market transaction (or as part of a contingent evaluation study) underestimate
the true risks, then the market (or the contingent evaluation study) will undervalue the
risks. In addition, since many individuals have difficulty accurately distinguishing, for
example, between the risk of death at 1 in 100,000 versus 1 in 1,000,000, value of life
estimates can easily be distorted, perhaps by an order of magnitude.

       Finally, the way in which individuals value risk depends on the type of risk.
Voluntary risks are generally more acceptable than involuntary risks.  Other factors of
potential importance include whether the risk is controllable or uncontrollable, ordinary or
catastrophic, old or new, necessary or unnecessary, and occasional or continuous (Litai
1980).

       Review of the Literature

       Unsworth (1992) reviewed three major surveys of the literature of the value of a
statistical life in which each of these methods was evaluated. Viscusi (1992), Miller (1990),
and Fisher et al  (1989)  The summary of results provided by Unsworth is presented in the
exhibit below

       Viscusi (1992) examined 39 wage-risk, consumer  market and contingent valuation
estimates of the value of life.  He concludes that labor market studies with carefully
constructed  risk variables, and contingent value studies with relatively large sample sizes
are the most suitable for policy applications.  Applying his expert judgement, he finds that
the most reasonable estimates of the value of life are clustered  in the $3-57 million range
(1990 dollars).

       Fisher et al (1989) examined 21 studies of willingness to pay for reductions in  risk.
They conclude the most defensible estimates lie in a range from $1.9-510 million (1990
dollars). The authors go on to express a greater confidence in the lower end of this range.
However, they also suggest that  this range is an underestimate.

       Miller (1990) examined 67 estimates of the value of life in which he considered 47 to
be reasonably sound.  Making adjustments to the 47 studies on the basis of age, income,
accuracy of nsk perception, and baseline level of risk, Miller calculates a mean value of the
adjusted 47 studies of $ 2 4 million (1990 dollars), and considers a relevant range to be plus
or minus 30% of the  mean, or $1.7-53.1 million.

       Choice of an Appropriate Range of Estimates

       Of the  three surveys reviewed, Unsworth (1992) concludes that  Viscusi and Fisher el
aj_  are a more appropriate starting point for estimating the value of life, because Miller
incorporates estimates from consumer behavior studies which  are deemed less appropriate
for environmental policy purposes, and because the adjustments made by Miller are subject
to considerable debate and are less defensible. Unsworth (1992) further suggests that Viscusi
estimates are more appropriate because they include more recent studies,  and  also include
more recent versions of some of the studies also considered by  Fisher et al. to be sound.

       Unsworth (1992)  then adds two studies included in Fisher et al  (1989), and which
Viscusi will include in a more recent survey soon to be published in the lournal of

-------
Economic Literature. Applying criteria suggested by Viscusi(1992) for studies applicable to
policy analysis, Unsworth (1992) narrows the review to 26 studies.  Simulating a lognormal
distribution and two triangular distributions, and comparing the shape of the simulated
distributions to the observed distribution of the 26 studies, Unsworth (1992) concludes that
the lognormal distribution is the most appropriate. That distribution has a mean value of
$4.8 million per life saved, and a standard deviation of $ 3.2 million.

-------
 .Viiviry AullMii  anil
I
I   Vis. MSI (IV).1)
I Islli I  < III sllml
	I Viol. IK (\'>H>>)
MilUi  (I
                                                                     SUMMARY  01-  Kl-d-Jvfl  VAI III-. Ol  I 111! SUKVI-YS
  Nninticf and IV|>c ul
     Slmlies  Surveyed
                              I1' SlU'lllS |HlllllsllCll
                             II.HII  l'»/l In I''1'! (..'ii
                             w.iKL  llsk ->linlli s   /
                             i IIIIMIIIII i  ill.nli I
                             Uuiln i  (i iiinlni^i  nl
                             i illll  slllllll s)
.' I  slllllll % |MlllllslKll
I,,.in \'»\ I.I I'JHX (IS
W 1^1  I 1st Slllllll S  -I
1 IIIIMIIIII I  111.11 III
sliiilii s, I muling ill
v ,l,,.l	 slii.li. s»
III \llllllCS (Hlllllslleil
II.HII 1971 in IVVII(17
w.im  list similes.  IS
tllllS.IIIILl  III Jill I
studies, jnil  IS
iiiiiliiigenl vjliuliiin
Slllllll'N)
                                                                          i if
                                                                   Itc-st lLMiinaU-i nl
                                                                     Value nl  I Jlc
                                  t/O.INNI to  \\l< .'
                                  iiullii.il (iiii|;in illy
                                  I. (Mllll ll III I'l'MI
IS III INN) l.i  MO I
inilliiiil (Hf. il.illiis)
S40.IIINMii till 7
iinllinn (in  S Ifi.lNNI in
SIS I nnlliiin  .is
i nielli illy i«  |«nli_il
IVHH  ilnll.iis)
                                                                                                   KcuMiimcniLilMins
                                M.lsl IC.IVIII.lllll.  islllll.ll.s III (III  V.llllc
                                nf hi.  .in.  .lii-.ii ii. I 111  ilu  \\ iii (7
                                llllllliMI l.lll)'..
III.  lll.isl lliUllMlil.  .li,|,m. ll  l.sillK
Illilll .lit  .1 I.IM|;i  ill I -.Illll Ills ll.llll  tl 'I
I.I  t III I llllllhill
                                                                                                  I he  sny.csli.il value nl  .1 sl.ilislu.il  life
                                                                                                  fni use in losl lir in. fil jn.ilysis jml
                                                                                                  l«-|{jl  il.iin.igc  uses is in  I lie i.ui£i.
                                                                                                  Illilll  II / Illllllllll  III 1 I  I  Illllllllll. Ullll
                                                                                                  .1 ieiili.il iLiiilcncy iif (2 4 million
                                                                                                                                                                          Qinimtnls
                                                   • ( IHK luili-i  ili.il ni.iiLcl slmlii s iiihfi  lli in «• i|'<
                                                   till.  SllllllCS  .IIL Illll .l|l|ll.l|lll.ll<  lui |Hllll>
                                                   ll>lllll .Illilll

                                                   • ' iiniliiilis  lliil slimlmil iiiinli I. ilu  M'.I  M. M
                                                   MlllMSl  LSlllll.lll S

                                                   • ri.ltiS  Ii SS  llll|llllMN till *IV|.li.| ll,ll>  |illnl  S,  .l
                                                   Illllllllll III V.llll.lllllll Slllllll S
                                                                                                                                                     • < IllltllllltS lll.ll «.!)•(  llslt  tslllll.lts  'n ll.u.  SI ''
                                                                                                                                                     iiiilliiiii  u-siill IIIHII  IHJSCS  ill (lit 111. .IMIII .1 nsl.
                                                                                                                                                     vin.ilili  .mil llliis sliiiulil iiiil IK  us. il  lui i "ilny
                                                                                                                                                  •  ( illullllllS  lll.ll 1C suits  lll.lll I. Ills. Illll I  III III. I
                                                                                                                                                  siinlus ii fliil |»iii mi. illy si^iiiln ml iltiwnu ml
                                                                                                                                                  lll.lst S

                                                                                                                                                  •  Sl.llCS llut  nillSl CSllllLlllS K|>.lll. .1  III  Ilu
                                                                                                                                                  lilc:ijluic unilcnil.ilc  llic  vjlnc |MI  sljlislu.il lili
                                                                                                                                                  .i|i|iiii|>iulc foe  fnviiiiiinicnl .1 jxiluy jn.ilysts
                                                   • Ailjtisls studies fni  use nl licfiiii.  lax
                                                   emu  in nsL peiicplion. einii  in s|>ciiln ..n.in  nl
                                                   nsL  v.m.ililcs. I'Hilusi.in uf nun l.it.,1 iii|uiy lists.
                                                   .!(;.•  Ill S.llll|llc |HI|lllljtlllll. .Illll  J|l|lllLS  I
                                                   sl.iiiil.inli/eil  2 S fkMieiil  ilisniunl i.ili*

                                                   • I  Xtlllllcs 211 SllllllLS Illilll lllllslil. I .Illilll  I. is. il
                                                   mi mm 
-------
                                  APPENDIX A-2

                    Review of Recent Literature on the Effect of
                      Smoking Policies on Smoking Behavior
       Studies Suggesting Limited Effect


Baile, Walter F. etal.. 1991. Impact of a Hospital Smoking Ban:  Changes in  Tobacco Use
and Employee Attitudes.  Addictive Behaviors. Vol. 16. pp. 419-426.

       A survey was taken approximately 4 months after a hospital wide smoking ban at
       the Lee Moffit Cancer Center and Research Institute where a hospital  wide ban on
       smoking was instituted. Separate questionnaires were developed for smokers, non
       smokers and those who had quit smoking since the ban.  Only five out of 88 smokers
       quit since the policy. The authors conclude that the ban had little effect on employee
       quit rates.


Beiner, Lois et al..  1989. A Comparative Evaluation of a Restrictive Smoking Policy in a
General Hospital. American Journal of Public Health. Vol. 79. No. 2.  February.

       A comparative study was made of two similar hospitals  One hospital instituted a
       restrictive smoking policy while the other did not.  Surveys were conducted one
       month prior to the policy, and 6 months and 12 months after the policy.  No
       significant difference was found in the quit rates at the two hospitals. However,
       cigarette consumption while at work was reduced at the policy hospital, without a
       commensurate increase in  smoking while at home.

       The smoking policy in  the  policy hospital was only partially restrictive. Smoking
       was permitted in sections of the cafeteria and coffee shop, and patients were also
       allowed to smoke in their rooms if their roommate did not object. It is not clear
       what impact the policy  may have had if the policy were more restrictive.
Gottlieb, Nell H. etal.. 1990.  Impact of a Restrictive Work Site Smoking Policy on
       Smoking Behavior, Attitudes, and Norms. Journal of Occupational Medicine. Vol.
       32. No. 1. January.

       Questionnaires were mailed to employees of the Texas Department of Human
       Resources. Subjects were surveyed  3 months prior to implementation of a smoking
       policy ( but 2 months after it was announced), and 1 month and 6 months after the
       policy became effective  The results showed no significant change in smoking
       prevalence, quit attempts, or daily cigarette consumption.  However, cigarette
       consumption while at  work was significantly reduced.
Daughton D.M. etal. 1992.  Total Indoor Smoking Ban and Smoker Behavior.

-------
      Preventive Medicine. Vol 21.  No. 5. pp 670-76. September.

      Hospital employees were surveyed 1 year after announcing, and 5 months after
      implementing a total ban on smoking.  A second follow up survey was conducted 2
      years after the announcement. The results showed little effect on overall
      institutional quit rates.  However, there was a decrease in consumption during
      working hours, particularly by moderate to heavy smokers.


Petersen, Lyle R. et al.  1988. Employee Smoking  Behavior Changes  and Attitudes
      Following a  Restrictive Policy  on  Worksite Smoking in a  Large  Company.   Public
      Health Reports. Vol. 103. No. 2.  March-April.

      Study of an Connecticut insurance company which adopted a smoking ban in all
      areas except in designated rest rooms and lounges. The authors collected data 1 year
      prior and 1 month and 3 months after the policy. The results suggested no increase
      in quit rates but a substantial reduction in cigarette consumption.

      Studies Showing a Moderate to Substantial Effect

Brenner, Hermann and Mielck, Andreas.  1992.  Smoking Prohibition in the Workplace
      and Smoking Cessation in the Federal Republic of Germany. Preventive Medicine.
      Vol 21. pp 252-261.

      A national survey was conducted in the Federal Republic of Germany, with an
      overall response rate of 66%.  Respondents were asked if smoking was allowed in
      their workplace. Quit ratios for women and men were examined and compared
      with workplace smoking policy. Smoking restrictions at  the workplace showed no
      affect on the quit ratio for men (0. 32 smoking allowed, vs. 0.33 smoking not
      allowed) but showed a substantial affect for women (0.18 smoking allowed vs 0.45
      smoking not allowed).  Both men and women showed a  considerably higher  attempt
      to quit rate in places were smoking was not allowed.  The mean number of cigarettes
      smoked per day for men was 20.2 (smoking allowed) and (18.4 smoking not allowed),
      and for women was 17.1 (smoking allowed) and 15.7 (smoking not allowed). This
      represents a 9% and an 8% reduction for men and women respectively.


Borland et al  1990.  Effect of Workplace Smoking Bans on Cigarette Consumption.
      American Journal of Public Health. Vol. 80. No 2. February.

      A total of 2,113 employees at the Australia Public Service were surveyed to
      determine the effect of a smoking ban on smoking behavior.  Surveys were
      completed two and four weeks before and five to six months after the ban  was
      instituted. The pre-ban  results showed that individuals restricted from smoking at
             their work stations consumed an average of 16.01 cigarettes per day compared
      with 20.54 cigarettes per day (22% less) at stations where smoking was allowed. After
      the    ban, the consumption rates were 14.16 and 15.36 (8% less) respectively. This
      shows that the effect of  the workplace ban was to reduce consumption by 12% (16.01
      versus 14.16) where there were prior work station restrictions, and by 25% where

-------
       there were no prior work station restrictions on smoking.


Borland, Ron, et al.  1991.  Predicting Attempts and Sustained Cessation of Smoking  After
the Introduction of Workplace Smoking Bans. Health Psychology. Vol 10.    No. 5.  pp 336-
342.

       Using the data from the survey of Australia Public Service employees, the authors
       examined factors that predict the initiation of cessation attempts, and the
       maintenance of cessation. The strength of the desire to quit was the best predictor of
       making an attempt to quit.  Having quit before the ban, as well as support from
       family and friends were also good predictors of attempting to quit. As expected,
       heavy smokers have the most trouble maintaining abstinence, and persons who
       have quit before are less likely to maintain abstinence. Social support for quitting
       was a modest predictor of maintenance.  The authors postulate that the  imposition
       of smoking bans should provide a context where smoking cessation is more likely.


Hocking Bruce, et al.  1991.   A Total Ban on Workplace Smoking Is Acceptable and
       Effective. Journal of Occupational Medicine. Vol 33. No. 2.  February.
       Telecom Australia is a telecommunications organization with 85,000 staff.     After
several years of introducing progressively  more restrictive policies,    Telecom Australia
introduced a total ban on smoking in 1988. Prior to and 6       and 18 months after the
ban, a survey of employees was conducted in    representative areas. The number of
smokers decreased by about 5% over the   two year period, compared with 2% for the
Australian community as a whole.  In addition, smokers were smoking 3-4 fewer
cigarettes/day after the ban.


Hudzinski, Leonard D. 1990.  One-Year Longitudinal Study of a No-Smoking Policy
       Medical institution.  CHEST. Vol. 97. No. 5. May.

       The Ochner Medical Institutions in New Orleans instituted  a campus wide smoke
       free policy.  A survey (1986-87) was conducted 6 months  prior, 6 months after,  and 1
       year after the policy was instituted.  Results suggested a 30% reduction (from 20 to
       14%) in population of smokers after 1 yr.  Half of those who quit said the policy had
       helped them a great deal. 80% of smokers after 1 year smoked less than 8 cigarettes
       per day.


Sorensen e. al. 1993.  Promoting Smoking  Cessation at the Workplace:  Results of a
       Randomized Controlled Intervention Study.

       In a controlled intervention  study at  8 sites in Bloomington Minnesota, smokers
       were surveyed 1 month and 6 months after a  three month  intervention program
       was completed.  The intervention consisted of consultation  with employees about
       the adoption of a nonsmoking policy, training to nonsmokers in providing
       assistance to smokers attempting to quit, and cessation classes for smokers.  After 1
       month, the quit rate for the intervention group was  11.5% compared to 5.2% for the

-------
      control group.  At the 6 month interval, the quit rate for the intervention group was
      12 % compared to 8.8% of the control group. These rates are adjusted for the effects
      of age, sex, and education. Quit rates were based on answers to the simple question,
      "Do you now smoke cigarettes?"and also, not assessing the length of abstinence.  The
      long term quit rates therefore are likely to be substantially lower than those reported.
      Those supported by an intervention program had a slightly higher quit success rate
      than those without such a policy.


Sorensen G. et. al. 1991. Effects of a Worksite Nonsmoking Policy: Evidence of
      Increased Cessation.  American Journal of Public Health. Vol. 81, No. 2, February.

      In 1986, the New England Telephone Company instituted a no smoking policy. A
      random sample of employees was taken 20 months after the policy was
      implemented. The results revealed a 21% reduction in smokers after 20 months
      (reduced to 18 % for those who had quit for more than 3 months). 42% of those who
      quit (9% of smokers) attributed their quitting to the no smoking policy.


Sorensen, Glorian and Pechacek, Terry F.  1989.  Implementing nonsmoking policies in
      the private sector and assessing their effects. New York State Journal of
      Medicine.  Vol. 89. January.

      Data was collected in a telephone interview from 711 smokers and recent ex-smokers
      at seven worksites in Bloomington, Minnesota.  In a survey conducted in 1986, 12-18
      months after intervention, 58% felt that quitting would be easier if they could not
      smoke at work. Of the 42% who tried to quit in the last 2 years,  20% succeeded.


Stave, G.M. and Jackson, G.W. 1991.  Effect of a Total Work-site Smoking Ban on
      Employee Smoking Attitudes. Journal of Occupational Medicine. Vol 33. No.8. pp
      884-90.

      In this study, the authors compared data on smoking attitudes and behaviors at
      Duke University Medical Center which adopted a smoking ban, and on  an adjacent
      campus where no such ban was adopted.  Surveys were conducted three months  and
      9 months after the smoking ban was in affect (9 months and 15 months after
      announcement). Three months after policy implementation, mean cigarette
      consumption during working hours had dropped from 8.1 to 4.3 cigarettes

      (47% decline) at the medical center and from 9.3 to 8.78 (6% decline) at the
      University Campus.  In the fifteen months after the  announcement 12.6%  of
      smokers at the Medical Center and 6.9% at the University Campus had quit.

StilLman, Frances A. et al.  Ending Smoking at The Johns Hopkins Medical Institutions:
      An Evaluation of Smoking Prevalence and Indoor Air Pollution.  JAMA, Vol 264.
      No 12. September 26,1990.

      In 1988, The Johns Hopkins University Hospital Complex decided to eliminate

-------
      smoking in all areas of the building complex.  Previous policy allowed smoking in
      designated areas of cafeterias, waiting areas, lounges, patient areas and offices.
      Surveys were conducted 6 months before and 6 month after the policy was
      instituted.  Smoking prevalence declined from 21.7% to 16.2% (25% decline).  The
      number of cigarettes smoked per day went from 16.4 to 13.1 (20% decline), and the
      cigarettes smoked while at work went from 7.8 to 3.8 (51% decline). The quit rate
      was 20.4% between surveys, but would be reduced to 10% assuming all
      nonrespondents (50%) did not quit. For those that had quit for more than 3 months
      at the time of the survey, the quit rates are adjusted to 18.2% and 9% respectively.


Wasserman, Jeffrey, etal.  1991. The Effects of Excise Taxes and Regulations on Cigarette
      Smoking. Journal  of Health Economics. Vol 10. pp 43-64.

      The authors used data on smoking status and behavior from 1970 to 1985 for adults
      from the National  Health Interview Survey, conducted annually by the National
      Center for  Health Statistics.  Data for teenagers was taken from the National Health
      and Nutrition Examination Survey  II.  A generalized linear model was used to
      estimate the effects of excise taxes and regulations on adult and  teenage smoking
      behavior.

      The authors used a regulation index in which a value of one was assigned to
      communities with comprehensive smoking laws in most  public places, including
      that including restrictions in workplaces, zero for no restrictions in any places, and
      values of .75, .50, .25 for combinations in between. They used a two stage model in
      which  the decision to smoke and the level of demand were analyzed sequentially.

      The authors predict that if the regulation index was raised from 0.25 (smoking
      restrictions in areas where people spend little time) to 1.00 (restrictions in almost all
      places, including workplaces), then per capita cigarette consumption for adults
      would decrease by 5.9%. For adults, the regulation index had a statistically
      significant  result only on the number of cigarettes smoked, not on the decision to
      smoke. The same change in the regulation index would have a different effect on
      teenage behavior.  Teenage consumption would decrease  by 41%.  However, this
      effect results mostly from preventing teens from starting  to smoke rather than
      reducing the consumption of teenage smokers.

Woodruff, T. J. et  al.  1993. Lower Levels of Cigarette Consumption Found in Smoke-free
Workplaces in California   Archives of Internal Medicine. Vol. 153. No. 12. pp        1485-
93. June 28.

      Woodruff,  et al. (1993) applied a logistics regression on data from the 1990 California'
      Tobacco Survey in which subjects were queried by telephone.  Prevalence was 13.7%
      in smoke-free workplaces compared with 20.6% in places  with no restrictions  (33%
      difference)  When the influence of  demographic variables were  accounted for, it was
      estimated that persons with little restrictions on smoking  were approximately 30%
      more likely to be smokers than were those working in smoke-free workplaces.

      The workplace smoking policies showed little effect on changing the smoking status

-------
of persons who were regular smokers 1 year prior to the survey.  Approximately 85%
remained regular smokers regardless of workplace smoking policy.  The authors
note that most of California's smoking policies had been implemented before the
survey date of July 1990, and that smokers who were likely to change their behavior
had already done so by the time the survey was taken.

However, there was a substantial effect of smoking policies on the proportion
of occasional smokers who became regular smokers. Of those that had been
occasional smokers one year prior to the survey,  21% had become regular
smokers in smoke free workplaces compared to 33% in workplaces with no
restrictions.  No data were shown for individuals who were previously non
smokers.

 Cigarette consumption per smoker was 13 % less among those with no workplace
restrictions compared with those working in a smoke-free environment (296 versus
341 packs per year). Accounting for reduced smoking prevalence and reduced
consumption by smokers,  including  occasional smokers, the authors estimate that if
all workplaces were smoke free,  consumption would be 41% lower than if there
were no workplace smoking restrictions.

-------
   APPENDIX B
Technical Appendix

-------
Explanation of Housekeeping




           and




 Maintenance Methodology

-------
                                 Technical Appendix
                 Housekeeping and Maintenance Impacts of H.R. 3434
Offices
Offices reported reduced cleaning costs due to reduced emptying and cleaning of ashtrays,
easier dusting of desktops and high areas, reduced washing of walls, reduced cleaning of
carpets, reduced cleaning of Venetian and horizontal blinds, reduced cleaning of HVAC vents,
and reduced cleaning of indirect lighting. For the purposes of this analysis, savings associated
with ash trays, dusting desktops and high areas, cleaning Venetian/horizontal blinds, and
cleaning HVAC vents are quantified. Cleaning costs are estimated using a prototype annual
cleaning budget for items that would change in a smoke-free environment. Generally, the
estimates are calculated by multiplying the time required for each task by the labor rate and the
frequency that each task would  be performed on an annual basis to develop annual costs per
1,000 square feet Detailed calculations are discussed below:

•  Ash trays The analysis assumed that under  a smoking environment, ash trays would be
   emptied and cleaned each business day for  a total of 250 times per year (52 weeks
   multiplied by 5 days per week, minus 10 holidays). One source actually reported that ash
   trays in their facility were emptied 3 times per day, however, once per day is more common.
   In a smoke-free environment, emptying ash trays would be completely eliminated. The
   estimate of the time required to empty and clean ash trays for 1,000 square feet of office
   space (2.5 minutes) is from a BOMA report on cleaning costs in office buildings.

•  EXislmg  According to one documented study by BOMA, the dusting of desks was reduced
   from daily to once per week in an office with a non-smoking policy. The analysis assumes
   that the frequency for dusting desktops will be reduced from 250 times per year to 52 times
   per year  The estimate of the time required to dust desk tops for 1,000 square feet of office
   space (2.2 minutes) is from a BOMA report on cleaning costs in office buildings.

•  Dusting High Areas: According to the BOMA study, the dusting of high areas (top of
   partitions) was reduced from once per week to once per month. The analysis assumes that
   the frequency for dusting high areas will be reduced from 52 times per year to 12 times per
   year The estimate of the time required to dust high  areas for 1,000 square feet of office
   space (4.5 minutes) is from a BOMA report on cleaning costs in office buildings.

•  Cleaning Venetian/Horizontal Blinds: According to  the BOMA  study, the cleaning of blinds
   was reduced from 6 times per year to once per year. The analysis assumes that the
   frequency for dusting high areas will  be reduced from 6 tunes per year to 1 time per year.
   The estimate of the time required to clean blinds for 1,000 square feet of office space (2.0
   minutes) is from a BOMA report on cleaning costs in office buildings.

•  Dueling HVAC Vents. According to the BOMA study, the dusting  of HVAC vents was
   reduced from 4 times per year to once per year. The  analysis assumes that the frequency for
   dueling vents \\ ill be  reduced from 4  times per year to 1 time per year. The estimate of the
   time required to dust HVAC vents for 1,000 square  feet of office space (10.0 minutes) is
   fr.-'i'-. a BOMA report on cleaning costs in office buildings.

Cost in\ mgs in offices were also reported due to reduced damage to carpets, furniture, and
computer equipment  Cigarette bums to carpets would be eliminated in a smoke free


                                         1              Housekeeping and Maintenance

-------
environment. Managers have the choice of either repairing bums or replacing the entire carpet
when the problem becomes too noticeable. This analysis assumes that carpets will be repaired
at an estimated cost of $100 per burn. One carpet repair is estimated to be necessary per year
per 1,000 square feet of office.

Office furniture will also be protected from bum damage in a smoke-free environment. One
article estimated that furniture would last three times as long with a smoking ban. Tax policy
estimates that the average depreciation life of business furniture is 7 years. The analysis
assumes that offices will normally replace furniture once every 7 years (when it can no longer be
depreciated) if there is no excess damage to the furniture (from burns, for example). Following
the estimate that furniture would need to be replace three times as often would lead to
replacing furniture once every 2 to 3 years in a smoking environment. Although this may be
accurate in extreme cases, the norm is probably less. The analysis assumes that office furniture
would be replaced once every 5 years in a smoking environment in comparison with once every
7 years in a smoke-free building. The value of office furniture was estimated by determining the
average price of a desk and upholstered desk chair from a large office furniture supplier ($525
for a desk and $230 for a chair). Six desk and chair sets were  assumed to be contained in 1,000
square feet of office space  (based on  occupancy standards).

Computer equipment, especially personal computers, represent another category of potential
savings in a smoke-free environment. Computers will remain cleaner, requiring less time to
repair and, in extreme cases, not need to be replaced as frequently. Based on interviews, the
analysis assumes that computer keyboards used by smokers will require replacement once every
1.5 years in comparison with once every 5 years for keyboards used by non-smokers. Also,
maintenance and repairs to computers of smokers would take 30 minutes longer due to
increased cleaning required.

The need for painting would also be reduced. The analysis assumes that painting would be
required once every 5 years in a smoking environment and once every eight years in a non-
smoking area.  The estimate of time required to paint 1,000 sq. ft  of office space is from Means
Facilities Maintenance Standards.

Will every building or business experience the potential savings estimated? A survey of
businesses found that 43 to 60 percent of businesses instituting a smoking ban experienced
maintenance cost savings. There are many plausible explanations as to why a firm may not
experience cost savings. For example, a business may have a fixed maintenance and janitorial
staff that will not be reduced but work on other activities if the smoking-related activities are
reduced. Also, some businesses may not be able to renegotiate existing cleaning contracts.
Finally, some businesses may simply have a higher tolerance for a dirty, dingy environment with
damaged carpets and furniture.

To take into account these  possibilities, a high and low estimate of savings is calculated. Also,
it is assumed that only a portion of potential office space will  fully realize the benefits. For
Offices, the low estimate included cleaning cost savings and reduced painting. In the case of
cleaning, 60 percent of the total square feet (7,081 million sq.  ft out of 11,802  million sq. ft) of
office space is estimated to report the savings. For painting, some tenant occupied office space
will in fact be painted more often than once every 5 years due to turnover of occupants. To take
this into account, the savings is only claimed  for offices expected to have longer occupancy
including government owned space and  single-owner occupied space (6,610 million sq. ft).

In the high estimate, carpet repairs, replacing of office furniture, replacing computer keyboards,


                                          2              Housekeeping and Maintenance

-------
and computer maintenance are added to the low estimate. Carpet repairs and furniture
replacement are calculated for 60 percent of the total square feet (7,081 million sq. ft out.of
11,802 million sq. ft) of office space. Computer-related costs are calculated based on the
estimate of personal computers used by smokers in the workforce (estimated at 25 percent of
20,330,000 total PC's in the workplace or 6,657,500 personal computers). This  figure does not
take into account damage to equipment other than PC's such as printers or PC's used by non-
smokers, but in an office that permits smoking.
Mercantile and Service

Retail stores and service outlets usually restrict smoking to certain common areas in the
building. In these areas, as smoking ban will eliminate the need to empty and damp wipe
ashtray stands, reduce sweeping and vacuuming, eliminate carpet burns, reduce the need to
clean windows and display cases, and reduce painting. For the purposes of this analysis,
cleaning costs are calculated for elimination of cleaning ashtray stands and reduced need to
sweep or vacuum. With smoking allowed, ashtray stands were assumed to require cleaning and
emptying once every day for approximately 290 days per year. In actuality, ash tray stands
may require more frequent cleaning such as two or three times per day, 365 days per year. The
cleaning time per 1,000 sq. ft (4.0 minutes) is derived by assuming 10 stands in 1,000 sq. ft
requiring 0.4 minutes per stand (from Means Facility Maintenance Standards) to empty and
clean. Sweeping and vacuuming is assumed to be required twice per week with smoking allowed
and once per week in a smoke-free environment. The time required to sweep/vacuum 1,000 sq.
ft is the minimum estimate from Means Facility Maintenance Standards.

Reduced maintenance costs were calculated for reduced carpet repairs and reduced painting.
Carpet repairs were estimated using the same assumptions described for Office space. Painting
was assumed to be reduced from once every 5 years to once every 7 years. This estimate may be
low since retail and service space must retain appearance to attract customers and may
therefore have lower tolerance for dingy walls.

Of the total 13,157 million square feet of building space classified as Mercantile and Services in
the Department of Energy estimates, it was assumed that for cleaning and carpet repairs, only
60 percent of this space would report savings. For painting, it was assumed that 30 percent
would report savings. Of this space, 40 percent was assumed to be in common areas subject to
smoking resulting in an applicable area of 3,158 square feet for housekeeping and by 1,579
million square feet for painting.


Food Service

Restaurants and lounges face much the same situation as hotels and motels. One restaurant
owner stated that they would need 20 additional employees to empty  ashtrays, sweep butts,
wash windows, and fill in absences without a no-smoking policy in the establishment. The
owner also reported less clean up time and fewer bums on tables. One  restaurateur was
considering installing expensive air cleaning and filtration equipment that were not necessary
when a no smoking policy was instituted.

For the purposes of this analysis,  cleaning cost savings were calculated for the elimination of
emptying ash trays every day, 6 times per day, under the assumption that ash  trays will be


                                          3              Housekeeping and Maintenance

-------
cleaned each time a new group arrives at a smoking table (2,190 times per year). This
assumption may be low since staff at nicer restaurants will often clean ashtrays several times
during a meal, particularly for heavy smokers. The cost time estimate to clean one ashtray is
from Department of the Army Janitorial Formulas. Reduced time due to sweeping butts and
washing windows was not estimated.

Painting is assumed to be necessary once every 4 years with smoking instead of once every 5
years. The painting frequency may in fact be much higher in nicer establishments subject to
heavy smoking. Damages due to cigarette burns are estimated assuming once carpet repair per
year per 1,000 square feet. The need to repair and replace table linens, chairs, and tables is
estimated at once every 5 years with smoking and once every 7 years (as employed in tax
depreciation calculations) without smoking. The value of a table and chair set is from Means
Square Foot Costs.

Expected savings are calculated on the basis of food service seating capacity for smokers.
According to the Department of Energy, the food service seating capacity is 27,753,000. It was
assumed that 80 percent of this capacity are expected to report savings due to a smoke-free
environment  This is a bit higher than the 60 percent expected in office spaces because food
service establishments will place a greater emphasis on appearance and cleanliness, and have a
lower tolerance for damages. Painting benefits were expected to accrue to 60 percent of the
smoking capacity. Assuming that 30 percent of the capacity is used by smokers, the smoking
seating capacity is 8,325,900.
Health Care

Health Care facilities contain a number of different types of space that is used for a variety of
purposes. Some space is used for administrative purposes such as billing and personnel. The
savings to this space would be the similar to that for offices. Space devoted to patient care
would have different types of savings. For the purposes of this analysis, administrative space
was assumed to have savings identical to those described for offices. It was assumed that 20
percent of space in Health Care facilities will be devoted to administrative functions.

Building space devoted to patient care will contain bed-ridden patients. It was assumed that
each smoking patient will require cleaning and emptying of an ashtray twice per day, 365 days
per year (730 days per year total). Also, space containing smoking patients will require
sweeping 1.5 times more often than rooms with non-smokers (548 vs. 365 times per year).

The total amount  of space for Health Care facilities is 4,225 million square feet. Savings
identical to those  calculated for offices are expected to accrue to 60 percent of this space.
Painting savings are expected to accrue to only 30 percent of the potential space.
Administrative functions is assumed to account for 20 percent or 845 million square feet.

Savings associated with patient care is calculated on the basis of the number of hospital beds
used by smokers.  It was assumed that 25 percent of the total beds (25 percent of 3,602,000, or
900,500) would be occupied by smokers. Given that smokers have a higher rate of
hospitalization than non-smokers, this figure may be low.
                                                         Housekeeping and Maintenance

-------
Assembly

Buildings that are used for assembly will accrue benefits to that portion of their space used as a
common areas with smoking permitted. The reductions in cleaning and maintenance were
calculated using the same categories and assumptions as the common areas for the Mercantile
and Services category. Savings are expected to accrue to 60 percent of this space for cleaning
and carpet repairs, and to 30 percent for painting. It was assumed that 20 percent of the area
expected to report savings would be in common areas, resulting in an applicable area of 821:
million square feet for housekeeping and carpet repairs, and 410 million square feet for
painting.


Education

As with Health Care facilities, Education facilities can be used in a variety of different ways,
particularly at the higher education (college and university) level. Since it is more likely that
smoking will be limited in elementary and secondary level  schools, this estimate will focus only
on institutions of higher learning (colleges, universities, junior colleges). A fair portion of space
in colleges and universities is devoted to administrative and office functions. These spaces
would accrue the same types of savings as general office space. Colleges and universities would
also have common areas similar to Assembly and Mercantile and Services space.

It is expected that benefits will be reported by 60 percent of the total space in colleges-and
universities (approximately 1,200 million square feet of 2,000 million square feet). For the
purposes of this analysis, it was assumed that half of the space in  colleges and universities
(600 million square feet) will be devoted to administrative and office uses. Benefits for this
space were calculated in the same manner as benefits for the office use. Another 20 percent will
be in common areas (240 million sq. ft). Benefits for these areas are calculated the same as
common areas in other types  of buildings (Assembly, for example).


Lodging

Hotels and motels face the unique challenge of maintaining a pleasant, clean, and attractive
building in the presence of smoking. Very often business and profits depend on how good a
room looks, its overall cleanliness, and its odor. Thus, cleaning, painting, and replacing carpets
and furnishings are done at a greater frequency than in an office environment. For the purposes
of this analysis, the only cleaning cost savings claimed is from the elimination of emptying and
cleaning ashtrays. The same basic methodology as described under offices was used. Carpet
repairs were also estimated to occur at the same frequency and cost the same amount. This will
probably underestimate actual savings since hotels and motels  will have less tolerance to
unsightly carpets, thereby leading to increased replacement of carpets rather than  repair.

Lodging space can also be divided into different uses. The  bulk of the space is used for guest
rooms, but some of the space is in common areas. Cost savings for common areas are estimated
using the same assumptions as other types of common areas. It is assumed that 20 percent of
the Lodging space is devoted to common areas.

Cost savings to guest rooms used by smokers could be quite large including reduced cleaning
time for each room, reduced carpet repairs, reduced painting, and reduced replacement of
furniture and linens. The need to repair and replace furniture and linens is estimated at once


                                          5              Housekeeping and Maintenance

-------
every 5 years with smoking and once every 7 years (as employed in tax depreciation
calculations) without smoking. The value of a standard set of furniture is from Means Square
Foot Costs. It is unclear whether H.R. 3434 will prohibit smoking in guest rooms designated for
smoking use, thus, savings associated with guest rooms are included only in the high estimate of
benefits.

Benefits are expected to accrue to 60 percent of lodging establishments for cleaning, repair and
replacing, but to 30 percent for painting savings.


Industrial/Warehouse

Warehouse and industrial environments will have lower aesthetic standards than other types of
establishments for their production areas. Reported activities for production areas that would
decrease under a no smoking policy for a warehouse include emptying ash trays and sweeping
floors. The savings associated with eliminating the need to empty ash trays is calculated in the
same manner as for other categories. Savings from reduced sweeping are calculated based on
the assumption that the frequency of sweeping would go from 2 times per week to once per
week in a smoke free environment, as reported in the literature.

The portion of industrial /warehouse space expected to report savings was assumed at 60
percent. A portion of this space would be devoted to administrative and office functions that
would be expected to have the same types of savings as offices. For the  purposes of this
analysis, 20 percent of the space in this category will be used for administrative purposes and
the remaining 80 percent will be used in production areas.


Total Savings

Exhibit B3-1 summarizes the low and high estimates of cleaning and maintenance savings for
each building category under H.R. 3434. Total square feet for each building category and
applicable square feet are also displayed. The savings per  square feet are also calculated.
                                                         Housekeeping and Maintenance

-------
  n.i-1 • Detailed Housekeeping and Maintenance Cost Savings by Type of Establishment
ASSEMBLY
   Cleaning:
   Empty and damp wipe ashtray stands
   Sweeping/vacuuming

   Malntenanee/Repalr/Replacement:
   Carpet Repairs
   Painting

   TOTAL
                                                 Potential
                                                 Savings
                                                 (per 1000 sq ft)
Total
Area
(Million Square Feet)
Portion
 Expected to
 Report Savings
Applicable
Area
Total
Expected
Savings
(millions ol dollars)
Total
Expected
Savings
(millions ol dollars)
$163 52
$72 80
S100 00
$104 39
6.838
6.838
6.838
6.838
4.103
4.103
4.103
4.103
821
821
821
410
$134
$60
$43
$134
$60
$82
$43
                                                          $237
                                                         $319
HEALTHCARE
   Cleaning:
   Empty and damp wipe ashtrays
   Dusting Desktops
   High Dusting
   Venetian/Horizontal Blinds
   Clean HVAC Vents

   Per Hospital Beds used by smokers-
   Empty and damp wipe ashtrays
   Sweeping

   Malntenanca/Repalr/Replacement:
   Replace Olhce Furniture
   Carpel Repairs
   Painting

   TOTAL
$87 50
$6294
$2520
$7 00
$1 05
$21 90
$127 75
4.225
4.225
4.225
4.225
4.225
3.602.000
3.602.000
2.535
2.535
2.535
2.535
2.535
2.161.200
2.161.200
507
507
507
507
507
900.500
900.500
$44
$32
$13
$4
$1
$20
$115
$44
$32
$13
$4
$1
$20
$115
$271 80
$10000
$130 48
4.225
4.225
4.225
2.535
2.535
2.535
507
507
254


$33
$138
$51
$33





$261
$449
EDUCATION
   Cleaning:
   Administrative/OMice Space
   Empty and damp wipe ashtrays
   Dusting Desktops
   High Dusting
   Venetian/Horizontal Blinds
   Clean HVAC Vents

   Common areas
   Empty and damp wipe ashtray stands
   Sweeping/vacuuming
$87 50
$6294
$2520
$1 40
$420
$14000
$7280
8.148
8.148
8.148
8.148
8.148
8,148
8.148
1.200
1.200
1.200
1.200
1.200
1,200
i.200
600
600
600
600
600
240
240
$53
$38
$15
$1
$3
$34
$17
$53
$38
$15
$1
$3
$34
$17

-------
    R3-1: Detailed Housekeeping and Maintenance Cost Savings by Type of Establishment
Continued
   EDUCATION, continued
     Malnlenance/Repalr/Raplacement:
     Administralive/Ollice Space
     Roplace Ollice Furniture
     Carpel Repairs
     Painting

     TOTAL
   MERCANTILE AND SERVICES
     Cleaning:
     Empty and damp wipe ashtray stands
     Sweeping/vacuuming

     Malntenence/Repalr/Replacemenl:
     Carpet Repairs
     Painting

     TOTAL
   LODGING
     Cleaning:
     Common Area Empty and damp wipe ashtrays
     Guest Room (smoking) General Cleaning (per room)

     Malntanance/Rapalr/Ra placement:
     Common Area Carpet Repairs
     Common Area  Painting (per 1000 sq ft)
     Guest Room (smoking)1 Replace Furniture (per room)
     Guest Rooms (smoking) Carpet Repairs (per room)
     Guest Rooms (smoking) Painting (per room)

     TOTAL
Potential
Savings
(per 1000 sq (1)
S271 80
SI 00 00
S130 48
Total
Area
(Million Square Feet)
8.148
8.148
8.148
Portion
Expected to
Report Savings
1.200
1.200
1.200
Applicable
Area
600
600
600
Total
Expected
Savings
(millions of dollars)

Total
Expected
Savings
(millions of dollars
$163
$60
$78





$160
$461

$163 52
$72 80
13.157
13.157
7.894
7.894
3.158
3.158
$516
$230
$516
$230

$100 00
$104 39
13.157
13.157
7.894
7.894
3.158
1.579
$165
$316
$165





$911
$1.227

$127 75
$245 28
2.855
5.053.000
1.713
3.031.800
343
1.263.250
$0
$0
$310

$100 00
$86 99
$127 50
$100 00
$43 49
2.855
5.053.000
5.053.000
5.053.000
5.053.000
1.713
3.031.800
3.031.800
3.031,800
3,031,800
343
171.300
1,263.250
1.263.250
1.263.250
$0
SIS
SO
$15
$161
$126
$55





$15
$667
   WAREHOUSBINDUSTRIAL
      Cleaning:
      Administrative Space
      Empty and damp wipe ashtrays
      Ousting  Desktops
      High Ousting
      Venetian/Horizontal Blinds
      Clean HVAC Vents
$87 50
$62 94
$25 20
$1 40
$4 20
$0 00
12.253
12.253
12.253
12.253
12.253
12,253
7,352
7,352
7,352
7.352
7,352
7,352
1.470
1.470
1.470
1.470
1,470
1.470
$129
$93
$37
$2
$6
$0
$129
$93
$37
$2
$6
$0

-------
    H3-1 • Detailed Housekeeping and Maintenance Cost Savings by Type of Establishment
Continued
  WAREHOUSE/INDUSTRIAL, continued
     Production Areas
     Empty and damp wipe ashtrays
     Sweeping

     TOTAL
                                                   Potential
                                                   Savings
                                                   (par 1000 sq It)
Total
Area
(Million Square Feet)
Portion
 Expected to
 Report Savings
Applicable
Area
Total
Expected
Savings
(millions of dollars)
Total
Expected
Savings
(millions ol dollars)
$87 50
S36.40
12.253
12.253
7.352
7.352
5.881
5.881
$5T5
$515
$214





S7B1
$995
   FOOD SERVICE
     Cleaning:
     Empty and damp wipe ashtrays

     Malntanance/Rapalr/Re placement:
     Replace Table and chair set
     Carpet Repairs
     Painting (per 1000 sq feet)

     TOTAL
$65 70
27.753.000
22.202.400
6.660.720
$438
$438

$26 85
$10.00
$86 99
27.753.000
27.753.000
1.167
22.202.400
22.202.400
700
6.660.720
6.660.720
700
$67
$0
$179
$67
$0





$504
$683
  OFFICES
     Cleaning:
     Empty and damp wipe ashtrays
     Dusting Desktops
     High Dusting
     Venetian/Horizontal Blinds
     Clean HVAC Vents

     Malntonance/Repalr/Re placement:
     Replace Office Furniture
     Carpet Repairs
     Painting
     Computer Maintenance (smokers)
     Computer Keyboard Replacement (smokers)
$87 50
$62 94
$25 20
$1 40
$4 20
11.802
11.802
11.802
11.802
11.802
7.081
7.081
7.081
7.081
7.081
7.081
7.081
7.081
7.081
7.081
$620
$446
$178
$10
$30
S620
$446
$178
$10
$30

$271 80
$100 00
$130 48
11.802
11.802
11.802
7.081
7.081
6.610
7.081
7.081
6.610


$863
S1.925
$708
$863
                                                                   Computers
                    Computer*
                  Computers
$21 25
$23 50
26.630.000
26.630.000
6.657.500
6.657.500
6.657.500
6.657.500
$141
$156
     TOTAL
                                                                                                                          $2.146
                                                                          $5.077

-------
      Examples of
Discounting Methodology

-------
B4-1- Vnliie of Reduced Absenteeism
                           Yoara
                                       10,91-2000    2001-2010   2011-2020    2021-2010    2031-2040
                                                                                                              2041-2090
                                                                                                                                   2031
    3% Celculellone
    Ou.ninq (' ovu E'limalo)
      Nur.-hnr I'er«nn4 (million)
      Value
      Dncount Factor
      Number Years ractor
      Prawn) Value
      Ann Equvatoni Value (Lo fa )
      Ann Equivalent Value (Hi E« )

    Reduced Initiation (Low Estimate)
      Number Persons (million)
      Reduced Absentee Days
      Value
      Discount Factor
      Number Yean Factor
      Present Value
      Ann Equivalent Value (Lo Est )
      Ann Equivalent Value (Hi Eil I

    5% Calculation*
    Quilting  (Low Estimate)
      Number Persons (million)
      Reduced Absentee Days
      Value
      Discount Factor
      Number Years Factor
      Present Value
      Ann Equvalenl Value (Lo Est )
      Ann Equvalenl Value (Hi Est )

    Reduced Initiation (Low Estimate)
      Number Persons (million)
      Reduced Absentee Days
      Value
      Discount Factor
      Number Years Factor
      Present Value
      Ann Eqimtont Value (Lo Est )
      Ann Equvabnt Value (Hi Esl )

    TK Calculation*
    Quitting  (Low Estimate)
      Number Persons (million)
      Reduced Absentee Days
      Value
      Dacount Factor
      Number Yean Factor
      Present Value
      Ann Equvalenl Value (Lo Esl )
      Ann Equivalent Value (Hi Esl )

    Reduced Initiation (Low Estimate)
      Number Persons (million)
      Reduced Absentee Days
      Value
      Discount Factor
      Number Yean Factor
      Present Value
      Ann Equivalent Value (Lo Est )
      Ann Equivalent Value (Hi Est )
1 35
0 78
BO 77
0 862608784
1000
696 74


021
0 30
31 44
0 892608784
1000
271 18


1 29
0 77
BO 58
0641861947
1000
517 21


059
089
92 29
0641861947
1000
592 36


1 09
0 66
6B IB
0 477605569
10 00
32562


097
1 46
151 83
0 47760S569
1000
725 13


073
044
45 51
0 355383398
1000
161 75


1 35
203
211 37
0 355313398
1000
751 16


038
023
23 52
0 26443B624
1000
62 19


1 74
260
27091
0 264438624
1000
716 38


0 10
006
6 28
0 196767171
1000
12 36


2 12
3 18
33045
0 196767171
1000
65021


000


0 184789408
3333



229
344
35724
0 164789408
3333
1.962 31







1.776
S3
tor





S.669
170
340
1 35
076
80 77
0763526166
1000
632 87


021
030
31 44
0 783526166
1000
246 32


1 29
0 77
8058
0481017098
1000
387 60


059
089
9229
0481017098
1000
44392


1 09
066
68 IB
0 295302772
1000
201 33


097
1 46
151 83
0 295302772
1000
44835


0 73
044
45 51
0 181290265
1000
8251


1 35
203
211 37
0 181290285
1000
383 19


036
023
2352
0 111296509
1000
26 17


1 74
260
27091
0 111296509
1000
301 51


0 10
006
628
0 068326402
1000
429


2 12
3 18
31045
0 068328402
1000
225 78





0050986213
2000



229
344
357 24
0050986213
2000
36429







1.335
67
111





2.413
121
241



1 35
0 78
8077
0712986179







0




1000
57589


021
030
31 44
712986179
1000
224 14


1 29
077
8058
0 38244602
1000
29206


059
089
9229
0 36244602
1000
13449


1 09
068
68 18
0 184249178
1000
12562


097
1 46
151 81
0 184249178.
1000
27974


071
044
4551
0 093662939
1000
4263


1 35
203
211 37
0 093662939
1000
19797


038
023
2352
0047613489
1000
11 20


1 74
260
270 91
0047613489
1000
12899


0 10
006
628
0 024204263
1000
1 52


2 12
3 18
330 45
0 024204283
1000
7996





0016128336
14 29



229
3 44
357 24
0016128336
1429
8231







1.049
71
147





1.128
91
188
                                  Note   EPA does not believe that discounting physical effects such as premature deaths or life years extended has
                                  any meaning  Only monetary values should be discounted   Discounting physical effects is done above only for
                                  analybc convenience and  to display discounting methodology

-------
Exhibit B6-3: Premature Deaths Avoided (PDA) From Quitting by Years of Abstinence
   Rn*9=No Restriction*
         Vaara	         HJO	1H1 le MOO	7001  IP 2010
                                                                                                        Mil  10 2020
                                                                                                                                 2021 i» 2010
                                                                                                                                                         2011  IB 2040
                                                                                                                                                                                       SO Yaar Totala
Aga
0-34
38-44
45-54
S5-64
85-74
75.
Total
Damnt % Quit
2215 3%
33 2*1 3%
28 001 3%
58510 3%
160780 3%
131 051 ' 3%
414.748
PR1*».1| PDA|2|
ParYMr
51% 507
51% 440
36% 637
23% 1128
18% 700
3413
PRMHMI PDA|2|
Par Your
84%
64% 553
58% 102?
49% 23S7
17% 683
4616
PRMRI1I POA|2|
Par Yaar
90%
90% 1580
80% 3859
70% 2752
81*1
pnn»«.i| PDA|2]
Par Yaar
05%
«0% 4341
65% 3342
76)3
PRMR|1) PDA|2|
Par Yaar
00%
; 85%. 1342
3342
Yaarry Airaraga lor ina SO Yaar Partod
Ltm Eatmata Man EMmata
Cut RMa - CM Rat* .
3% 6%
6.071 1 86% 10.146
*.)1) 386% 1*/*'-
12.3*0 11 80% 44*/'«0
116.680 4380% 233.700
106.1*6 3* 71% 216,376
272.43) 100 00% 644.878
9.4491 | 10.898
              1  Proportional reduction in mortality
              2  Premalura Daatna Avoided
              3% calculaltona
               3% DIIC Fell
              f y*an factor
              Pramatura Daarht Awdad
               Diacoumad lo 1890
              Oiae  LYEtoUfoEip
               Diaeounwd to 190O
              DIIC  lYE»Ao.6S
               OitcounMd to 18*0

              8% eiteulatloM
               3% DIIC Far
              • yran (actor
              Pramarura Doalha Awadad
                                                                                                                                                   Oracouirnd Valuaa

0 882608784
10
34 120
29440
304 215
282 41O
172261
148.594
0641861947
10
46.1 S7
29 626
315.794
202.606
119 192
76.505
0 477605569
10
81 906
39119
383 327
1R3070
83728
39.989
0 355383398
10
78 829
27 304
243 474
86 527


0 264438624
10
31.418
8.837
44 667
11.812


Low EaMmala
Tot PIM Val



1 31.326

746.812

205.008
Ann Earn



4.010

21.100

7.9S1
Ugh Eirnnai*
Tot PrM Val A



268.062

1,401,068

8J0.176
nn Eounr



1,000

44,709

18.009
0 783526166
1O
34 120
26 741
304.21 S
238.361
172261
134.071
0 461017098
10
48 197
22202
315.704
1 91 .902
110 192
57.334
0 295302772
10
81 006
24.187
383.327
113.198
83,728
24.729
0 181290285
10
76 829
13 028
24] 474
44 130


0 111296509
10
31 418
1 719
44 667
4.971





•0.778

882.171

217.010



4.81*

10,677

8.611



181.8*6

1.108.142

414.0)0



0.07)

11.1)4

11.021
               Dacountad to 19*0
              One lYEtoUteEip
               Diacounwd to I09O
              Due LYE to A». 65
               Diacountad lo 10*0

              7% Calculation*
               3% DIIC Far
              • yaara lactor
              Pramatura DMtha Amdad
               DiacowiMd to 10*0
              Diac LYE to bra E»p
               Diacountad lo 1090
              DiiC LYE to Ago 65
               Diacountad to 1000

               Note  EPA does not believe that discounting physical effects such as premature deaths or live years extended has any meaning  Only monetary
               values should be discounted   Discounting physical effects is done above only for analytic convenience and to display discounting methodology
0 7120661 79
10
14 120
24 334
304 215
216001
172 261
122.620
0 36244602
10
48 157
16 72*
319 704
114 498
11* 102
43.201
0 18424*178
10
81 906
15081
383 327
70.628
83 728
15.427
0 093662939
10
76829
7.1*6
243.474
22 804


0 047613489
10
33.418
1.501
44.667
2.127





04.041

420.01)

101.447



4.S40

12.800

6.441



120.081

851.637

162.0)6



0.002

26.816

10.887

-------
 RG-4: Premature Deaths Avoided (PDA) From Reduced Initiation
=Mo Restrictions
                                                                                                                                   SO Veer Totals

Age
O-34
35-44
45-54
55 64
65-74
75*
Total
PDA/Year
Cumulative Total

1990 1941-2000
Oeathe
2.215
33.291
28.901
58.510
160.780
131.051
414. 748


HI In Deaths |1]
3%






61
609
?001-2010

5%
3%





1.026
10.873
2011-2020

5%
5%
3%




2.570
36.572
2021-2030

5%
5*
5%
3%



4.829
84.866
2031-2040

5%
5%
5%
5%
3%


10.567
190.539
2041-2050

5%
5%
5%
S*
5%
3%

17.789
368.426
2051 »

5%
5%
5%
5%
5%
5%

20.737

Yearly Average for the SO Year Period
PDA
Low Ell
S%
5.039
St.Otl
36.840
45,345
44,214


190.S39
3.811

PBTCWII

3%
31%
19%
24%
23%


100%

PDA
High Eat
10%
10,078
118,182
73.8(9
•0.691
88,428


381,078
7,622
      Wo assumeall new smokers come Iron the youngest age group, that a constant number is added every year, and that it takes 60 years lor the smoking population to completely change
      Therelore. it takes 60 years for the smoking population to be reduced by the estimated reduction in the initiation rate, with 1/60lh ot that reduction taking place each year
      2  Average rate over the lirsl 10 year Increment in which new smokers are added each year
      3% Dlacount Calculation!
       3% Disc  Fclr
      I years lactor
      Premature Deaths Avoided
        Discounted to 1990
      Disc LYE to Lite Eip
        Discounted 10 1990
      Disc LYE to Age 65
        Discounted to 1990

      5% Dlacoum Calculations
       5% disc lactor
      • years factor
      Premature Deaths Avoided
        Discounted to 1990
      Disc LYE to Die E»p
        Discounted to 1990
      Disc LYE to Age 65
        Discounted to 1990

      7% Discount CaleuMton*
       7% disc lactor
      f years lactor
      Premature Deaths Avoided
        Discounted to 1990
      Dice LYE to Life E>p
        Discounted to 1990
      Disc LYE to Age 65
        Discounted to 1990

0 862608784
10
609
525




0641861947
10
10.262
6.587
187.715
120.487
156.549
100.483
0 477605569
to
25.701
12.275
468.884
223.942
378.022
180.545
0 355383398
10
48.294
17.163
746.241
265.202
539.708
191.803
0 264438624
10
105,873
27,944
1.090,251
288,304
609.482
161.170
0 196767171
10
177.887
35.002
1.304.094
256.603
609.482
119.926
0 146413254
33 33333333
691.247
101,208
4.478.351
855.690
2.031.806
297.454
Low Estimate
Tot, Pros Val Ann



200,704 8

1.810.228 84

1.011.382 91
Equhr



,021

,307

.541
High Estimate
Tot Pres Val Ar



401.408

n Edutv



12.042

3,620,45* 108,614

2.102.764

63,083
0







.783526166
10
609
477




0 481017098
10
10262
4936
187.715
90294 29415
156.549
75302 69277
0 295302772
to
25701
7589
468.884
138462 7601
378.022
1116309456
0 181290285
10
48294
8755
746.241
135286 1995
539.708
97843 90028
0 111296509
10
105673
11761
1.090.251
121341 1245
609.482
67833 18196
0 068326402
10
177887
12154
1.304,094
8910402987
609,482
41643 68943
0 041946484
20
414748
17397
4.478.351
187851 0931
2.031.606
85218 70957



63.071

7(2,340

479.473



1,892

22,870

14.384



128.142

1,924,679

•S8.946



3.784

45,740

28,768
0.712986179
10
609
434




0 36244602
10
10262
3720
187,715
68.037
156.549
56.741
0 184249178
10
25701
4735
468.884
86.392
378.022
69.650
0 093662939
10
48294
4523
746.241
69.895
539.708
50.551
0047613489
10
105673
5031
1.090,251
51,911
609.482
29,020
0 024204283
10
177887
4306
1.304.094
31.565
609.482
14.752
0 01230423
14 28571429
296249
3645
4.478.351
55.103
2.031.608
24.997



28,395

3(2,901

245.710



7(2

10,887

7.371



92,789

725,803

491.421



1.584

21,774

14.743
       Note:  EPA does not believe that discounting physical effects such as premature deaths or live years extended has any meaning. Only monetary
       values should be discounted.  Discounting physical effects is done above only for analytic convenience  and to display discounting methodology.

-------
hihit BG-5:  Premature Deaths Avoided From Reduced Consumption
 n ;»«•»= No Rmtrlcllona
                                             19»1  to  2006
                                                                    2001  te  2010
                                                                                      2011 to 1020
                                                                                                       2B21 le 2030
                                                                                                                        2031  10  2040
                                                                                                                                           8041 t beyond
                                                                                                                                                                          50 Year Tol»li
                                                                                                                                                                                                          Years


Age

0-34
39-44
43-94
53-64
89-74
73.
Toll!

1490 Adliislad lor
Daitrn Ouitting » Heduced
Per Year Initiation |1|
(Low Estimate)
2.215 2.121
33 791 31 880
28 901 27 877
58 510 56.030
160780 153986
131 051 12S.497
414,74* 397,171

% Reduction f?M3 PDA
Per Vaar
Low Estimate)
10% 51% 108
10% 51% 1,619
10% 51% 1,406
10% 36% 2 034
10% 23% 3 600
10% 18% 2.235
11,002

FWfl PDA
Par Year

64% 135
64% 2.035
64% 1,766
58% 3 263
49% 7.525
17% 2.180
16.904

PFM) PDA
Par Vaar

90% 191
90% 2.669
90% 2.491
90% 5.043
80% 12.317
70% 8.765
31.608

FFM1 PDA
PerYeai

95% 202
95% 3,029
95% 2.629
95% 5.323
90% 13.8S7
85% 10.667
35.708

PflrVR PDA
Par Vaar

95% 202
95% 3.029
95% 2.829
95% 5.323
90% 13.857
85% 10.667
39.708

P*R PDA
Par Vaar

100% 212
100% 3,188
100% 2.768
100% 5.603
100% 15.397
100% 12.550
39.717
Yearly Average for tha 50 Vaar Parlod

Llvea Sand Paretnt U»e» S»v»d
Low Eel High Eat
10% 20%
8.370 0.84% 16.398
121.803 *60% 243,880
100,216 834% 211.449
208,830 16.02% 410.115
511,5*1 39.09% 998.762
145,344 26.16% 174.916
1.116.14* 100.00% 2.560.496
28.203 91.209

Deaths
Age
jow Estmaie)
0-34
15-44
45-54
55-64
65-74
fs.
Teual

         1   Tha reduced consumption rite apolm only to smokers after reducing Iho current •making population lo account lor those thai quit or tail to nrtata smoking
         2   The maximum proportional reduction m mortality is equal to the percent reduction m consumption, and rs assumed lo be reached in 50 years (PRM lactor • 100%)  The
         lime path ol PDM lactor is assumed to be Iho same as lor quitting
                                                                                                                                                             Pleeeumed Value.
                      3% calculation*
                       3% Disc For
                      • years lactor
                      Premature Deaths Avoided
                       Discounted to 1990
                      Disc LYE to Life E«p
                       Dacounted to 1990
                      Dae LVE lo Age 65
                       Discounted to 1990

                      5% eateulMlons
                       5% Doc Fctr
                      • years lector
                      Ptemiture Deaths Avoided
                       Discounted to 1990
                      Disc LYE to Life E»p
                       Discounted to 199O
                      Disc LYE to Age 65
                       Discounted lo 1990

                      7» eeteulanene
                       7% Dae Fctr
                      • year* lactor
                      Premature Deaths Avoided
                       Discounted lo 1990
                      Disc LYE to Life E«p
                       Discounted to 1990
                      Dae LVE 10 Age 65
                       Discounted to 1990

0 8626068
10
110.021
94.905
1.014.051
874.729
574.203
495.313
0 6418619
10
169,037
108,498
1.052.647
675.854
397,308
255.017
0 4776056
10
318 958
151.381
1 277 758
610.264
279 093
133.298
0 3553834
10
357,065
126.895
811.580
288.422


0 2644386
10
357,065
94.422
148689
39.372


0221463184
33 33333333
1.323.905
293.196




Low Eanmate
Tot Pros Val Ann Equiv



819,2*7

2.488,441

681.628



21.07*

74.651

28.90*
High Estimate Low E
Tot Pros Val Ann Equnr



t.718.504

4,978.682

1.767.291



52.158

149.106

91,018
0 7835262
10
110021
86204
1.014051
794.S3S
574.203
449.903
0 4810171
10
169.037
81.110
1. 052.647
506.141
397.308
191.112
0 2953028
10 00
116.958
93.599
1.277.758
377.325
279.093
62.417
0 1812903
10
357.065
64.732
811.580
147.112


0 1112985
10
157,065
39 740
148.889
16 571


0 083051169
20
7*4,343
65.971







411.556

1,841,904

721.412



21.571

92.099

16.172



681.112

1,661,806

1.446.864



41. tig

184..

72,141
07129862
10
110.021
78.443
1.014.051
723 004
574 203
409.399
0 362446
10
169.037
61.267
1.052.647
361.528
397.308
144.003
0 1842492
10
316.958
56.399
1.277.758
235.426
279.093
51.423
0 0936629
10
357.065
33 444
811.580
76.015


0 0476135
10
357.065
17.001
148 889
7.089


0 031726878
14
567.388
18.001







266,556

1,421,062

694.824



18,850

99,114

42.31*



511.112

2,846,121

1.209.648



17.118

169,229

84.675
         Note   EPA does not believe that discounting physical effects such as premature deaths or live years extended has any meaning
         Discounting  physical effects is done above only  for analytic convenience and to display discounting methodology
Only monetary values should be discounted

-------