STUDY: Smoking and its effects will cost the average West Virginia smoker $1.8 million over their lifetime


The country shape of West Virginia made of tobacco ash and a cigarette.(series)

CLARKSBURG, W.Va. – The latest study by WalletHub looks at what it calls the “real cost of smoking.” According to the report, West Virginia is the 14th least costly state to be a smoker in.

Source: WalletHub

Over a lifetime(69 years, the average lifespan of a smoker), the cost to the average West Virginia smoker is $1,870,173. That number breaks down to $107,573 spent on cigarettes, $1,199,300 that could’ve been earned in the stock market if you invested the amount spent on tobacco products, $132,899 in healthcare costs, $422,064 in lost income and $8,337 in other costs.

When broken down on a yearly basis, it looks like this:

  • Total cost per smoker: $38,962
  • Cost of tobacco products: $2,241
  • Financial opportunity cost: $24,985
  • Healthcare costs: $2,769
  • Lost income: $8,793
  • Other costs: $174

Below is how the study calculated each of the different metrics to come up with its rankings:

Out-of-Pocket Costs
To determine per-person Out-of-Pocket Costs Over a Lifetime, we took the average cost of a pack of cigarettes in each state and multiplied that figure by the total number of days in 48 years. For Costs per Year, we multiplied the average cost by 365 days.

Financial Opportunity Cost
To determine the per-person Financial Opportunity Cost, we calculated the amount of return a person would have earned by instead investing that money in the stock market over the same period. We used the historical average market return rate for the S&P 500 minus the inflation rate during the same time period to reflect the return in present-value terms.

Health-Care Cost per Smoker
Direct medical costs to treat smoking-connected health complications are one of the biggest financial drains caused by tobacco use. To calculate related health-care costs, we obtained state-level data from the Centers for Disease Control and Prevention — namely the annual health care costs caused by smoking — and divided that amount by the total number of adult smokers in each state.

Income Loss per Smoker
Previous studies have shown that smoking can lead to loss of income, either because of absenteeism, workplace bias or lower productivity due to smoking-related health problems. This can create a wage gap between smokers and nonsmokers. To represent the negative relationship between earnings and smoking, we assumed an average 18 percent decrease in the median household income for each state. We arrived at this figure after a recent survey from National Longitudinal Surveys found that smokers earn 18.1 percent less than nonsmokers.

Other Costs per Smoker
Nonsmokers are generally entitled to a homeowner’s insurance credit of between 5 and 15 percent, according to the Independent Insurance Agents & Brokers of America. Given that fact, we assumed an 11.1 percent increase (i.e. the inverse of a 10 percent credit, or the average between the two percentages) in the average homeowner’s insurance premium for each state to represent the penalty cost for smokers.

We then took into account the costs for victims of secondhand-smoke exposure. To calculate these costs, we used the per-nonsmoker expenditure in the state of New York as a proxy. We then multiplied that figure by the number of nonsmokers in each state to obtain the total costs of exposure to secondhand smoke at the state level. Finally, we divided the resulting total by the number of smokers in each state. This approach assumes that, in a perfect society, smokers would also pay the costs related to the harmful smoke that tobacco releases into the air.

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