Smoking and Health in the Americas Smohg md Health in the Ameticas A 1992 Report of the Surgeon General, in collaboration with the Pan American Health Organization U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Public Health Service Centers for Disease Control National Center for Chronic Disease Prevention and Health Promotion Office on Smoking and Health PAN AMERICAN HEALTH ORGANIZATION Pan American Sanitary Bureau, Regional Office of the WORLD HEALTH ORGANIZATION Suggested Citation U.S. Department of Health and Human Services. Smoking and Health in the Americas. Atlanta, Georgia: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 1992; DHHS Publication No. (CDC) 92-8419. THE SECRETARY OF HEALTH AND HUMAN SERVICES WASHINGTON. O.C. 20201 FLY i + 1~32 The Honorable Thomas S. Foley' Speaker of the House of Representatives Washington, D.C. 20515 Dear Mr. Speaker: It is my privilege to transmit to the Congress the 1992 Surgeon General's report on the health consequences of smoking as mandated by Section 8(a) of the Public Health Cigarette Smoking Act of 1969 (Pub. L. 91-222). The report was prepared by the Centers for Disease Control's Office on Smoking and Health in conjunction with the Pan American Health Organization. The topic of this report, Smokina in the Americas, reflects a concern for the broader problems posed by tobacco consumption. The report explores the historical, social, economic, and regulatory aspects of smoking in the Western Hemisphere. It defines the current extent of tobacco control activities in the countries of the Americas and stresses the need for regional coordination and cooperation in our efforts to create a smoke- free society. The countries of North America --the United States and Canada--are in the midst of a major epidemic of smoking-related disease, including cancer, heart disease, disease, chronic obstructive lung and adverse outcomes of pregnancy. The countries of Latin America and the Caribbean now show evidence of a rising prevalence of smoking, particularly among young people, and in the absence of efforts to decrease tobacco use, are likely to be swept by a similar epidemic. I believe that we in the United States must provide leadership through continued efforts to control tobacco consumption and prevent the uptake of smoking by young people. In addition, I believe that we must participate fully in regional efforts to develop effective smoking-control programs. Sincerelv. Enclosure THE SECRETARY OF HEALTH AND HUMAN SERVICES WASHINGTON. O.C. 20201 The Honorable Dan Quayle President of the Senate Washington, D.C. 20510 Dear Mr. President: It is my privilege to transmit to the Congress the 1992 Surgeon General's report on the health consequences of smoking as mandated by Section 8(a) of the Public Health Cigarette Smoking Act of 1969 (Pub. L. 91-222). The report was prepared by the Centers for Disease Control's Office on Smoking and Health in conjunction with the Pan American Health Organization. The topic of this report, Smokino in the Americas, reflects a concern for the broader problems posed by tobacco consumption. The report explores the historical, social, economic, and regulatory aspects of smoking in the Western Hemisphere. It defines the current extent of tobacco control activities in the countries of the Americas and stresses the need for regional coordination and cooperation in our efforts to create a smoke- free society. The countries of North America --the United States and Canada--are in the midst of a major epidemic of smoking-related disease, including cancer, heart disease, disease, chronic obstructive lung and adverse outcomes of pregnancy. The countries of Latin America and the Caribbean now show evidence of a rising prevalence of smoking, particularly among young people, and in the absence of efforts to decrease tobacco use, are likely to be swept by a similar epidemic. I believe that we in the United States must provide leadership through continued efforts to control tobacco consumption and prevent the uptake of smoking by young people. In addition, I believe that we must participate fully in regional efforts to develop effective smoking-control programs. Sincerely, Louis W. Sullivan, M.D. Enclosure Foreword By the mid-1980s, an estimated 526,000 people in the Americas were dying each year of diseases that are directly attributable to smoking. The number contin- ues to increase. Most of these deaths occur in Canada and the United States, where smoking has been a widespread, entrenched habit for over 60 years. However, approximately 100,000 deaths occur annually in the countries of Latin America and the Caribbean. We are in the unfortunate position of watching an epidemic-like the one we are currently living with in the United States-begin to gather momentum among our neighbors. The determinants of smoking are complex. Many forces are brought to bear on the young person who is deciding whether or not to smoke. The current overall prev- alence of smoking in a population-a general measure of its social acceptability- plays a large role. The frequency with which peers or role models smoke may be even more important. The current laws and regulations that govern smoking may influence the decision, as do the price of cigarettes and the ease with which they can be purchased. The extent to which tobacco products are advertised and the forms and mechanisms for tobacco promotion are also likely to have a major influ- ence on a young person's decision. All of these combine in an intricate way to create a social norm; the individual decision is hardly an isolated and independent event. Considerable gains have been made against smoking in Canada and the United States in recent years. As documented in previous Surgeon General's reports, the prevalence of smoking in the United States has been falling at a rate of approximately 0.5 percentage points per year. But millions continue to smoke, and the current rate of decline will not reduce smoking prevalence to the goal of 15 percent set for the year 2000. It is clear that the efforts under way in the United States and Canada are important in maintaining the momentum of smoking abate- ment, but it is equally clear that they are insufficient. More sectors of society must be brought into the nonsmoking coalition, and the tools at our disposal must be further strengthened. Other countries of the Americas face different circumstances. For some, still in the process of economic development, the prevalence of smoking is still low, and the problem may have a lower priority than more acute public health concerns. For others, further along in their development, diseases associated with smoking are already major causes of death, and the prevalence of smoking is high among young people in urban areas. Overall, the impact of smoking-related illness is not yet as evident in the other countries of the Americas as in Canada and the United States. However, the high prevalence among young people in many of these countries is ominous. Each country must deal with its problem in its own political, economic, and cultural context. Nonetheless, the countries of the Americas face a common threat, even though they may be in differing stages of its evolution. A common approach, characterized by agreement on goals, objectives, and means, can benefit the entire region. The Pan American Health Organization (PAHO) has taken significant steps to establish a forum for the exchange of ideas and for the development of a joint plan of action. As a regional branch of the World Health Organization, PAHO in turn takes part in an international forum for coordinated action against tobacco. The individual decision to smoke-both now and in the future-will ultimately be influenced by these efforts of the global community. This Surgeon General's report is the twenty-second in a series that was inaugurated in 1964 and mandated by law in 1969. The current report looks at the place of smoking in the societies of the Americas and at the current efforts to prevent and control tobacco use. It is perhaps best viewed as a planning document, a portrayal of the current situation in the Americas that will provide the basis for a concerted approach to future prevention strategies. James 0. Mason, M.D., Dr.P.H. William L. Roper, M.D., M.P.H. Assistant Secretary for Health Director Public Health Service Centers for Disease Control Preface from the Surgeon General, U.S. Department of Health and Human Services This 1992 report of the Surgeon General, Smoking and Health in the Americas, is the second on smoking and health during my tenure as Surgeon General. Over the years, the reports have systematically examined the effect of smoking on human health: the biologic effects of substances in tobacco, the risks of disease, the susceptibility of target organs, the addictive nature of nicotine, and the evolving epidemiology of the problem. The reports summarize a massive amount of infor- mation that has accumulated on the untoward effects of tobacco use, now easily designated the single most important risk to human health in the United States. The 1990 report, The Health Benefits of Smoking Cessation, documented the positive impact of quitting and thus furthered the logical argument leading to a smoke-free society. This report is a departure from its predecessors in that it treats the evidence against smoking as an underlying assumption. The issue for the future is how we will go about achieving a smoke-free society, and a consideration of smoking in the Americas is an early step in that direction. The report explores the historical, epidemiologic, economic, and social issues that surround tobacco use in the Amer- icas. It focuses on cultural antecedents and trends, on social and economic struc- ture, and on the local, national, and regional efforts that are currently under way to control tobacco use. One of the striking inferences to be drawn from the report is that the countries of the Americas occupy a continuum of consequences related to smoking. This continuum appears to be related to overall economic development. Countries that are furthest along the path of industrialization have gone through a period of high smoking prevalence and are now experiencing the incongruous combination of declining prevalence and increasing morbidity and mortality from smoking. Other countries, substantially along the path, are entering a period of high prevalence and may also be experiencing some of the disease and disability associated with smok- ing. Still others, less developed industrially, have low prevalences of smoking and relatively lower estimates for smoking-attributable mortality, but must contend with numerous other public health issues. Not all countries fit easily into such a simple classification. Within countries, there is considerable diversity in the pace of industrialization, urbanization, and general development as well as in the manifestation of th'e effects of tobacco use. But the classification is useful in defining the pathway that all countries are likely to take. In the absence of coordinated action, the epidemic of tobacco use is likely to proceed according to a well-defined script: gradual adoption of the smoking habit, long-term entrenchment of tobacco use, and a major loss of human life. The forces that create this script are complex and often difficult to untangle. One of the major findings of the report is the crucial role of surveillance in understanding the intricate interrelationship of the factors that influence smoking. 122 The educational level of the population, for example, illustrates the complexity. Data from selected sources indicate that smoking is more prevalent among highly educated women than among less-educated women. One would think that in- creased education would be linked to a greater awareness of and concern about the health consequences of smoking, but this assumption appears incorrect. It may be that a higher educational level, especially in developing countries, imparts greater susceptibility to messages that promote positive associations with smoking. Only through systematic monitoring of smoking prevalence as well as of the knowl- edge, attitudes, and behaviors of the population can we appreciate the underlying reasons for the current epidemiologic configuration. Such appreciation, in turn, is the basis for a rational prevention and control program. Another area in which surveillance is critical is in the monitoring of the tobacco sector of the economy. Such monitoring should include production, consumption, price structure, and taxation policy as well as advertising and promotion of tobacco products. The structure of the industry in any country will have important ramifi- cations for the growth and "success" of the commodity. One of the fundamental paradoxes of market-oriented societies is that some entrepreneurs-even acting completely within the prescribed rules of business practice-will come into conflict with public health goals. The market structure of the tobacco industry constitutes a major threat to public health simply because the product is tobacco. In the tobacco industry, attempts to control a large market share, marketing to target groups, widespread use of innovative promotional techniques, and corporate growth, development, and consolidation-in short, the traditional elements of successful entrepreneurial activity-are ultimately inimical to the public health. Each country faces its own resolution of this paradox, but recognizing and monitoring it is fundamental to the prevention and control of tobacco use. Most countries of the Americas have begun to face these complex issues. Several have taken major steps, others tentative ones, but all should recognize the crucial role of international coordination and cooperation. It is clear that although most countries can have significant impact on their own smoking-related problems, the international community can become smoke-free only by acting in concert. The process is an arduous one that begins with multifaceted efforts to change social norms regarding smoking and that moves ultimately to a disappearance of demand for tobacco products. I hope that the current report will serve as an impetus for continuing activity in the control of smoking and for mobilization of international resources toward the goal of a smoke-free society. Antonia C. Novello, M.D., M.P.H. Surgeon General iv Preface from the Director, Pan American Healfh Organization Diseases related to smoking are an important cause of premature deaths in the world, both in developed and developing countries. Eliminating smoking can do more to improve health and prolong life than any other measure in the field of preventive medicine. Developing countries, including those of Latin America and the Caribbean, are not behind their neighbors in the north with regard to the tremendous growing problem of noncommunicable diseases related to tobacco consumption. Over the last three decades, the countries of Latin America and the Caribbean have experienced important changes in their demographic, socioeconomic, and epidemiologic profiles. Increasing numbers of the older, more urban, and espe- cially the poorer populations of the region, are dying of diseases related to lifestyle determinants. Consumption of tobacco is one of these harmful threats to the health and well-being of our populations. Despite that, in most of the developing countries of our region, not enough attention has been given to generate actions and the kind of information needed for policy and program formulation with regard to tobacco control. It is also unfortun- ate that while the transnational conglomerates in control of almost all tobacco production and marketing have directed their efforts toward penetrating develop- ing economies, many governments, given the urgent needs created by other health problems, and in some cases due to financial or economic reasons, consider tobacco control a low priority. The United States Government and the Pan American Health Organization (PAHO) have been working in a joint effort to generate the information included in the Surgeon General's report, and the PAHO country report, which hopefully will bring more awareness and promote action against smoking in the region of the Americas. Our collaboration with the Office of the Surgeon General has been highly satisfactory, and it will encourage the development of a regional network for implementing research and exchange of successful experiences in the control of tobacco addiction. Carlyle Guerra de Macedo, M.D., M.P.H. Director Acknowledgments This report was prepared by the Department of Health and Human Services and under the general direction of the Centers for Disease Control, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health. William L. Roper, M.D., M.P.H., Director, Centers for Disease Control, Atlanta, Georgia. Jeffrey P. Koplan, M.D., M.P.H., Director, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Virginia S. Bales, M.P.H., Deputy Director, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Michael I'. Eriksen., Sc.D., Director, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. 7'he editors of the report were Richard B. Rothenberg, M.D., M.P.H., Senior Scien- tific Editor, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Gwendolyn A. Ingraham, Managing Editor, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Barbara Sajor Gray, M.Ln., Senior Writer-Editor, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Judith Navarro, Ph.D., Consulting Editor, Chief, Editorial Services, Pan American Health Orga- nization, Washington, D.C. Senior contributing editors were Aloyzio Achutti, M.D., Professor, Discipline of Promotion and Protection of Health, School of Medicine, Federal University of Rio Grande do Sul, Port0 Alegre, Brazil. Neil E. Collishaw, M.A., Chief, Tobacco Products Section, Environmental Health Directorate, Health and Welfare Canada, Ottawa, Canada. Ronald M. Davis, M.D., Chief Medical Officer, Michigan Department of Public Health, Lansing, Michigan. Eric Nicholls, M.D., Regional Advisor in Chronic Diseases, Pan American Health Organization, Washington, D.C. Thomas E. Novotny, M.D., M.P.H., Liaison Officer, School of Public Health, University of California, Berkeley, California. Sylvia C. Robles, M.D., Department of Public Health, School of Medicine, University of Costa Rica, San Jose, Costa Rica. Margarita Ronderos Torres, M.D., MSc., Head of Epidemiology and Prevention Division, National Cancer Institute, Bogota, Colombia. Contributing authors were Jorge Balan, Ph.D., Director, Center for the Study of State and Society, Buenos Aires, Argentina. Luis G. Escobedo, M.D., M.P.H., Medical Epidemi- ologist, Surveillance and Research Branch, Division of Adolescent and School Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Eugene M. Lewit, Ph.D., Director of Research and Grants, Economics, David and Lucile Packard Foundation, Los Altos, California. Thomas E. Novotny, M.D., M.P.H., Liaison Officer, School of Public Health, University of California, Berkeley, California. Ruth Roemer, J.D., Adjunct Professor, School of Public Health, University of California, Los Angeles, California. Philip L. Shepherd, Ph.D., Associate Professor, Department of Marketing and Environment, Florida International University, Miami, Florida. Robert Sobel, Ph.D., Professor of Business History, Hofstra University, Hempstead, New York. Kenneth E. Stanley, Ph.D., Department of Biosta- tistics, Harvard School of Public Health, Boston, Massachusetts. Johannes Wilbert, Ph.D., Emeritus Professor of Anthropology, University of California, Los Angeles, Pacific Palisades, California. Reviewers were Francisco Lopez Antuiiano, M.D., Director, Health Program Development, Pan American Health Organization, Washington, D.C. vii Elias Anzola, M.D., Medical Officer, Health Promotion Program, Pan American Health Organization, Washington, D.C. Howard Barnum, I'h.D., Senior Economist, The World Bank, Washington, D.C. Glen Bennett, M.P.H., Coordinator, Smoking Education Program, Health Education Branch, National Heart, Lung, and Blood Institute, National Institutes of Health, Bethesda, Maryland. Monica Bolis, Advisor on Legislation, Health Policies Development Program, Pan American Health Organization, Washington, D.C. A. David Brandling-Bennett, M.D., Program Coordinator, Health Situation and Trend Assessment Program, Pan American Health Organization, Washington, D.C. Allan M. Brandt, Ph.D., Associate Professor, Department of Social Medicine, School of Medicine, University of North Carolina, Chapel Hill, North Carolina. David M. Burns, M.D., Professor of Medicine, University of California, San Diego Medical Center, San Diego, California. Peter W. Burr, Agricultural Economist, Tobacco, Cotton, and Seeds Division, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, D.C. Juan Chackiel, Chief of Demography, Latin American Center for Demography, CELADE, Santiago, Chile. Claire Chollat-Traquet, Ph.D., Scientist, Tobacco or Health Program, World Health Organization, Geneva, Switzerland. Gregory N. Connolly, D.M.D., M.P.H., Director, Office for Nonsmoking and Health, Massachusetts Department of Public Health, Boston, Massachusetts. Joe H. Davis, M.D., M.P.H., Assistant Director for International Health, Centers for Disease Control, Atlanta, Georgia. Ronald M. Davis, M.D., Chief Medical Officer, Michigan Department of Public Health, Lansing, Michigan. Allan C. Erickson, Senior Vice President for Cancer Control, American Cancer Society, Atlanta, Georgia. Sev S. Fluss, MS., Chief, Health Legislation, World Health Organization, Geneva, Switzerland. William H. Foege, M.D., M.P.H., Executive Director, Carter Center of Emory University, Atlanta, Georgia. Clark W. Heath, Jr., M.D., Vice President of Epidemiology and Statistics, American Cancer Society, Atlanta, Georgia. Thomas A. Hodgson, Ph.D., Chief Economist, Office of Analysis and Epidemiology, National Center for Health Statistics, Centers for Disease Control, Hyattsville, Maryland. Bo Holmstedt, M.D., Director, Department of Toxicology, Karolinska Institute, Stockholm, Sweden. Dean T. Jamison, Ph.D., Department of Public Health and Policy, London School of Hygiene and Tropical Medicine, London, England. C. Everett Koop, M.D., Sc.D., Surgeon General, U.S. Public Health Service, 1981-1989, Bethesda, Maryland. Alan Lopez, Ph.D., Statistician/Demographer, Global Health Situation Assessment and Projections, World Health Organization, Geneva, Switzerland. J. Michael McGinnis, M.D., Director, Office of Disease Prevention and Health Promotion, Department of Health and Human Services, Washington, D.C. Anthony R. Measham, M.D., Chief, Population, Health, and Nutrition Division, The World Bank, Washington, D.C. Anthony B. Miller, M.B., FRC, Professor, Department of Preventive Medicine and Biostatistics, Faculty of Medicine, University of Toronto, Ontario, Canada. W. Henry Mosley, M.D., M.P.H., Professor and Chairman, Department of Population Dynamics, Johns Hopkins University, School of Hygiene and Public Health, Baltimore, Maryland. Eric Nicholls, M.D., Regional Advisor in Chronic Diseases, Pan American Health Organization, Washington, D.C. Donald Maxwell Parkin, Ph.D., Chief, Unit of Descriptive Epidemiology, International Agency for Research on Cancer, World Health Organization, Lyon, France. Mark A. Pertschuk, J.D., Executive Director, Americans for Nonsmokers' Rights, Berkeley, California. Michael Pertschuk, J.D., Codirector, The Advocacy Institute, Washington, D.C. John M. Pinney, Chief Executive Officer, Cooperate Health Policies Group, Washington, D.C. Ranate Plaut, M.D., Epidemiologist, Health Situation and Trend Assessment Program, Pan American Health Organization, Washington, D.C. . Vllf Gerard0 Reichel-Dolmatoff, Ph.D., Adjunct Professor, University of California, Los Angeles, California. Helena Restrepo, M.D., Coordinator, Health Promotion Program, Pan American Health Organization, Washington, D.C. Laurent Rivier, DSc., Director, Drug Analysis Unit, Institute of Forensic Medicine, University of Lausanne, Switzerland. Thomas C. Schelling, Ph.D., Distinguished Professor of Economics and Public Affairs, Department of Economics, University of Maryland, College Park, Maryland. Richard Evans Schultes, Ph.D., Professor Emeritus and former Director, Botanical Museum, Harvard University, Cambridge, Massachusetts. Donald R. Shopland, Coordinator for Smoking and Tobacco Control Program, Division of Cancer Prevention and Control, National Cancer Institute, National Institutes of Health, Bethesda, Maryland. Jesse L. Steinfeld, M.D., Surgeon General, U.S. Public Health Service, 1969-1973, San Diego, California. Daniel A. Sumner, Ph.D., Deputy Assistant Secretary for Economics, Office of the Assistant Secretary for Economics, U.S. Department of Agriculture, Washington, D.C. Cesar A. Vieira, M.D., Coordinator, Health Policies Development Program, Pan American Health Organization, Washington, D.C. Kenneth E. Warner, Ph.D., Professor of Public Health Policy, School of Public Health, University of Michigan, Ann Arbor, Michigan. Ernst L. Wynder, M.D., President, American Health Foundation, New York, New York. Other contributors were Patricia Ardila, Bilingual Editor, The Circle, Inc., McLean, Virginia. Cathy D. Arney, Graphic Artist, The Circle, Inc., McLean, Virginia. John Artis, Courier, The Circle, Inc., McLean, Virginia. Carol A. Bean, Ph.D., Consultant, Artemis Tech- nologies, Inc., Springfield, Virginia. Nowell D. Berreth, Writer-Editor, Public Information Branch, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Byron Breedlove, M.A., Assistant Branch Chief, Editorial Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Kelly L. Byrne, Desktop Publishing/Word Processing Specialist, The Circle, Inc., McLean, Virginia. Maria Luisa Clark, M.D., Editor, Editorial Services, Pan American Health Organization, Washington, D.C. Gail A. Cruse, Technical Information Specialist, Technical Information Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Alice A. DeVierno, M.L.S., Manager, Technical Information Center, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Sue T. Dixon, Secretary, Office of the Director, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Seth L. Emont, Ph.D., Epidemiologist, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Christine S. Fralish, Chief, Technical Information Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Gary A. Giovino, Ph.D. , Chief, Epidemiology Branch, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Betty H. Haithcock, Editorial Assistant, Editorial Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Gwendolyn A. Harvey, Program Analyst, Office of the Director, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Susan A. Hawk, Ed.M., MS., Program Analyst, Office of the Director, National Center for Health Statistics, Centers for Disease Control, Hyattsville, Maryland. Phyllis E. Hechtman, Editorial Assistant, The Circle, Inc., McLean, Virginia. John Helsel, Senior Systems Analyst, The Circle, Inc., McLean, Virginia. ix Timothy K. Hensley, Technical Publications Writer- Editor, Public Information Branch, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Frederick L. Hull, Ph.D., Writer-Editor, Editorial Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Delle B. Kelley, Technical Information Specialist, Technical Information Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Mescal J. Knighton, Writer-Editor, Editorial Services Branch, National Center for Chronic Disease Pre- vention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Gayle Lloyd, M.A., Editor, Technical Information Center, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Peggy Lytton, Editor, The Circle, Inc., McLean, Virginia. Patricia McCarty, Secretary, Public Information Branch, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Rachel R. Merritt, Secretary, Technical Information Center, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Jennifer A. Michaels, M.L.S., Technical Information Specialist, Technical Information Center, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Reba A. Norman, M.L.M., Technical Information Specialist, Technical Information Services Branch, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Cathie M. O'Donnell, Project Director, The Circle, Inc., McLean, Virginia. Richard Ray, Director of Computer Services, The Circle, Inc., McLean, Virginia. Flor M. Rojas-Jaber, Editorial Assistant, Editorial Services, Pan American Health Organization, Washington, D.C. Carlos Rossel, Publications Specialist, Editorial Services, Pan American Health Organization, Washington, D.C. Beverly Schwartz, M.S., Special Advisor, Public Information Branch, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Rita Shelton, Senior Editor, Editorial Services, Pan American Health Organization, Washington, D.C. Janete da Silva, Health Manpower Development Pro- gram, Pan American Health Organization, Washington, D.C. Daniel R. Tisch, Director of Publications, The Circle, Inc., McLean, Virginia. Kymber N. Williams, M.A., Public Information Specialist, Public Information Branch, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Atlanta, Georgia. Rebecca B. Wolf, M.A., Program Analyst, Office of Program Planning and Evaluation, Centers for Disease Control, Atlanta, Georgia. X Smoking and Health in the Americas Countries of the Americas 3 Notes on the Text 5 Chapter 1. Introduction, Summary, and Chapter Conclusions 7 Chapter 2. The Historical Context 25 Tobacco Use in Indigenous Societies 2 9 The Emergence of the Cigarette, 1492-1900 23 The Emergence of the Tobacco Companies, 1900 to the Present 32 Chapter 3. Prevalence and Mortality 57 Prevalence of Smoking in Latin America and the `Caribbean 62 Smoking-Attributable Mortality in Latin America and the Caribbean 82 Chapter 4. Economics of Tobacco Consumption in the Americas 202 Economic Costs of the Health Effects of Smoking 205 Economics of the Tobacco Industry 224 Chapter 5. Legislation to Control the Use of Tobacco in the Americas 243 Legislation to Control Production, Manufacture, Promotion, and Sales 248 Legislation to Change Smoking Behavior 253 The Impact of Antitobacco Legislation 262 Chapter 6. Status of Tobacco Prevention and Control Programs in the Americas 2 79 National Programs for Tobacco Control 283 Regional Activities for Tobacco Control in Latin America and the Caribbean 185 Elements of Prevention and Control Programs 186 List of Tables and Figures 207 Index 209 Countries of the Americas Latin America Andean Area Bolivia Colombia Ecuador Peru Venezuela Southern Cone Argentina Chile Paraguay Uruguay Brazil Central America Belize Costa Rica El Salvador Guatemala Honduras Nicaragua Panama Mexico Latin Caribbean Cuba Dominican Republic Haiti Puerto Rico Caribbean Anguilla Antigua and Barbuda Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Dominica French Guiana Grenada Guadeloupe Guyana Jamaica Martinique Montserrat Netherlands Antilles and Aruba Saint Kitts and Nevis Saint Lucia Saint Vincent and the Grenadines Suriname Trinidad and Tobago Turks and Caicos Islands Virgin Islands North America Canada United States of America Data in this report are almost exclusively presented by the above regions. In some instances, however, information is presented separately for the French overseas depart- ments in the Americas (French Guiana, Guadeloupe, and Martinique) and the French territory Saint Pierre and Miquelon, which is in North America. Such instances are noted in the text. The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the Pan American Health Organization or the U.S. Department of Health and Human Services concerning the legal status of any country, territory, city, or area of its authorities, or concerning the delimitation of its frontiers or boundaries. Notes on the Text Trade Names Use of trade names is for identification only and does not constitute endorsement by the Public Health Service or the U.S. Department of Health and Human Services. Company Names Current names are used to identify companies throughout the report. In some instances, exact names could not be verified from current sources, and the best available information was used. On tables reproduced from other sources, the nomenclature used in the original source was retained. Sources used to verify company names included Tobacco International's 57th Annual Directory and Buyer's Guide, 1992 (Vol. 192, No. 21, New York: Lockwood Trade Journal Co., Inc., 1990) and the following online databases: D&&Dun's Market Identifiers, ICC British Company Directory, and ICC British Company Financial Datasheets. The complete name is used for the first mention of a company, after which an abbreviated form is generally used. Organizations, Campaigns, and Slogans Names of organizations, coalitions, committees, government agencies, and other groups, as well as names of public information campaigns and health campaigns and their slogans were verified in online sources (Encyclopedia of Associations, MEDLINE, and several news services) and in the files of the Pan American Health Organization (PAHO). Not all such information was verifiable, and translations made into English sometimes varied. Every reasonable effort was made to obtain the official name and/or standard translation; we regret any inaccuracies that may have occurred. Legislation and Health Warnings The legal and the popular names of legislation and the wording of health warnings required on advertisements and packaging of tobacco products were verified in several sources. These included the United States Code Service (online database), PAHO's LEYES database (see Chapter 5, Appendix 2), the International Digest of Health Legislation, copies of legislation, and the files of the Centers for Disease Control's Office on Smoking and Health. We regret any errors that may have resulted from incomplete files or inaccurate translations. Botanic Substances Names of substances discussed in Chapter 2 are treated as non-English words unless they appear in Webster's Third New International Dictionary of the English Language, un- abridged, Springfield, Massachusetts: G. & C. Merriam Company, 1981. The spelling of non-English words was verified in foreign language dictionaries or used as cited in original sources. Chapter 1 Introduction, Summary, and Chapter Conclusions Introduction 9 Development of the Report 9 Major Conclusions 10 Summary 10 Chapter Conclusions 12 Chapter 2. The Historical Context 22 Chapter 3. Prevalence and Mortality 12 Chapter 4. Economics of Tobacco Consumption in the Americas 22 Chapter 5. Legislation to Control the Use of Tobacco in the Americas 23 Chapter 6. Status of Tobacco Prevention and Control Programs in the Americas 13 References 14 Introduction Recognition that the problems posed by per- sonal risks are amenable to social solutions is an im- portant contribution of modern public health. Each person makes choices, but such choices are shaped by social, economic, and environmental circumstances. On an even broader scale, national choices are made in a complex regional or global setting. This report attempts to place the personal risk of smoking in the Americas in the larger context and to underline both the heterogeneity and the interrelationship of nations. Previous Surgeon General's reports have fo- cused primarily, although not exclusively, on the epi- demiologic, clinical, biologic, and pharmacologic aspects of smoking. With the twenty-fifth anniversary report (U.S. Department of Health and Human Ser- vices 1989), in which considerable attention was de- voted to the social, economic, and legislative aspects of tobacco consumption, the need to place tobacco in a larger context was made apparent. Accordingly, this report now examines the broad issues that surround the production and consumption of tobacco in the Americas. Development of the Report The 1992 Surgeon General's report was prepared by the Office on Smoking and Health (OSH), National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control, Public Health Service, U.S. Department of Health and Human Ser- vices, as part of the department's responsibility, under Public Law 91-222, to report current information on smoking and health to the U.S. Congress. OSH, a World Health Organization Collaborat- ing Center for Smoking and Health, works closely with the Pan American Health Organization (PAHO). In the Regional Plan of Action for the Prevention and Control of Tobacco Use, PAHO responded to the thirty-third meeting (1988) of its Directing Council, which recommended that PAHO (1) collaborate with the countries of the Americas in the development of national programs for the prevention and control of smoking and (2) cooperate with member states and government and nongovernment centers and groups in identifying and mobilizing resources to contribute to this plan of action (PAHO 1989). In February 1988, the Surgeon General, then C. Everett Koop, M.D., Sc.D., and the PAHO Director, Carlyle Guerra de Macedo, M.D., M.P.H., agreed to the development of a Surgeon General's report that focuses on smoking in the Americas. OSH and the Health of Adults Program of PAHO began work on this project. OSH and PAHO presented the concept of a col- laborative effort to attendees of the Fourth PAHO Subregional Workshop on the Control of Tobacco (Central America) in November 1988. Meetings of the Latin American Coordinating Committee on Smoking Control were also attended by OSH and PAHO staff in Santa Cruz, Bolivia (January 1989), and in Port of Spain, Trinidad and Tobago (March 1989). Four experts on tobacco and health (from Brazil, Canada, Colombia, and Costa Rica) served on the Senior Editorial Board, and a collaborator was identi- fied in each of the participating member states. In September 1989, work began on the current report and on a country-by-country summary of the current sta- tus of tobacco prevention and control in the Americas, which PAHO is issuing as a companion document to this report (PAHO 1992). The current report has been prepared from re- views written by experts in the historical, socio- demographic, epidemiologic, economic, legal, and public health aspects of smoking in the Americas. In addition to standard bibliographic sources, the report uses data supplied by the U.S. Department of Agricul- ture, the Centers for Disease Control, The World Bank, the World Health Organization, the Economic Com- mission for Latin America and the Caribbean, the Caribbean Community Secretariat, the Latin Ameri- can Center on Demography, the International Union Against Cancer, the International Organization of Consumers Unions, the American Cancer Society, and the Latin American Coordinating Committee on Smoking Control. In addition, this report uses information derived from a data collection instrument developed by PAHO (with technical assistance from OSH) for the companion report on the current status of tobacco prevention and control in PAHO's member states. The data collection instrument requested current in- formation on tobacco cultivation, cigarette consump- tion, legislation, taxation, government and non- government programs to control tobacco, tobacco-use surveys, and tobacco-related disease impact. Detailed information from this data collection instrument was reviewed at meetings in Caracas, Venezuela (Febru- ary 1990), and Port of Spain, Trinidad and Tobago (March 19901, before incorporation into PAHO's country- by-country status report. Infroducfion 9 Major Conclusions Five major conclusions have emerged from re- view of the complex factors affecting smoking in the Americas. The first two relate to the current size of the problem; the latter three, to current conditions that have an important influence on the prevention and control of tobacco use. 1. The prevalence of smoking in Latin America and the Caribbean is variable but reaches 50 percent or more among young people in some urban areas. Significant numbers of women have taken up smoking in recent years. 2. By 1985, an estimated minimum of 526,000 smoking- attributable deaths were occurring yearly in the Americas; 100,000 of these deaths occurred in Latin America and the Caribbean. Summary 3. In Latin America and the Caribbean, the current structure of the tobacco industry, which is domi- nated by transnational corporations, presents a formidable obstacle to smoking-control efforts. 4. The economic arguments for support of tobacco production are offset by the long-term economic effects of smoking-related disease. 5. Commitment to surveillance of tobacco-related factors-such as prevalence of smoking; morbid- ity and mortality; knowledge, attitudes, and prac- tices; tobacco consumption and production; and taxation and legislation-is crucial to the develop- ment of a systematic program for prevention and control of tobacco use. The use of tobacco in the Americas long predates the European voyages of discovery. Among indige- nous populations, tobacco was used primarily for the pharmacologic effects of high doses of nicotine, and it played an important role in shamanistic and other spiritual practices. Its growth as a cash crop began only after the European market was opened to tobacco in the early and mid-seventeenth century. During early colonial times, the focus for tobacco cultivation shifted from Latin America and the Caribbean to North America, where a light, mellow brand of to- bacco was grown. Despite antitobacco movements, the popularity of tobacco increased dramatically after the U.S. Civil War, and by the early part of the twen- tieth century, the cigarette had emerged as the tobacco product of choice in the United States. The first half of the twentieth century witnessed a spectacular increase in the popularity of cigarettes and in the growth of several major cigarette manufac- turing companies in the United States. Interest in international expansion was minimal until after World War II. In the early 195Os, preliminary reports of the health effects of tobacco first appeared; these were followed in 1964 by the first report of the Surgeon General on the health effects of smoking (Public Health Service 1964). These events, which were ac- companied by a downturn in U.S. tobacco consumption, ushered in a period of rapid international expansion by the tobacco companies. Their expansion into Latin America and the Caribbean was typified by a process of denationalization-that is, the abandonment of local government tobacco monopolies and the cre- ation of subsidiaries by U.S. and British transnational tobacco corporations. The transnational companies were particularly successful in altering local demand by influencing consumer preferences. Local taste for dark tobacco in a variety of forms was largely replaced by demand for the long, filtered, light-tobacco ciga- rettes produced by the transnational companies. During the 198Os, several divergent forces influ- enced the consumption of tobacco in Latin America and the Caribbean. Changing demographics (primar- ily declining birth and death rates and an overall growth in the population), increasing urbanization, improving education, and the growing entry of women into the labor force-all expanded the poten- tial market for tobacco. Although systematic surveil- lance evidence is lacking, an increased prevalence of smoking among young people, particularly women in urban areas, appears to have occurred during this period. A countervailing force, however, was the major economic downturn experienced by most coun- tries of Latin America and the Caribbean during the 1980s. The result was that despite the increasing prev- alence of smoking in some sectors of the population, overall consumption of tobacco declined. Unlike the decline in North America, however, the decline in Latin America and the Caribbean seems to have been 10 Introduction based on income elasticity rather than on health concerns. The health burden imposed by smoking in Latin America and the Caribbean is currently smaller than that in North America. A conservative estimate is that, by the mid-1980s, at least 526,000 deaths from smoking-related diseases were occurring annually in the Americas and that approximately 100,000 of these deaths occurred in Latin America and the Caribbean. Since the smoking epidemic is more recent, less wide- spread, and less entrenched in Latin America and the Caribbean than in North America, it may be thought of as less "mature'`-that is, sufficient time has not yet elapsed for the cumulative effects of tobacco use to become manifest. Because health data from Latin American and Caribbean countries vary in consis- tency and comprehensiveness, establishing overall trends for morbidity and mortality is difficult. None- theless, the available evidence suggests an important contrast between North America on the one hand, and Latin America and the Caribbean on the other. In the United States and Canada, smoking-associated mor- tality is high and increasing because of high consump- tion levels in the past, but prevalence of smoking is declining. In Latin America and the Caribbean, prev- alence of smoking is high in some sectors, but smoking- attributable mortality is still low compared with that for North America. This contrast augurs poorly for public health in Latin America and the Caribbean, unless action is taken. The health costs of smoking are considerable. The U.S. population of civilian, noninstitutionalized persons aged 25 years or older who ever smoked cigarettes will incur lifetime excess medical care costs of $501 billion. The estimated average lifetime medi- cal costs for a smoker exceed those for a nonsmoker by over $6,000. This excess is a weighted average of the costs incurred by all smokers, whether or not they develop smoking-related illness. For smokers who do develop such illnesses, the personal financial impact is much higher. Available data do not permit a firm estimate for Latin America and the Caribbean. The estimate will probably vary with the health care structure of the country, but the burden is likely to increase with in- creasing development and industrialization. None- theless, early evidence suggests that smoking- prevention programs can be cost-effective under current economic circumstances. The economics of the tobacco industry in the Americas are complex. Although tobacco had long been thought to be an inelastic commodity, it has been demonstrated to be both price and income elastic. Such elasticity renders tobacco use susceptible to con- trol through taxation and other disincentives. Reve- nues from tobacco have been an important, though variable, source of funds for governments, but the case for promoting tobacco production on economic grounds is weak. Currently, only a few countries of Latin America and the Caribbean have economies that are largely dependent on tobacco production. The current economic picture, coupled with consumer re- sponsiveness to income and price and the potential health hazards, has created a significant opportunity for tobacco control in Latin America and the Caribbean. This opportunity is reflected, to some extent, in the fact that most countries of the Americas have legislation that controls tobacco use. Restrictions on advertising, the requirement of health warnings on tobacco products, limits on access to tobacco, and restrictions on public smoking have all been invoked. The legislative approach is not systematic, however, and in many countries, the programs have gaps. Fur- thermore, the extent to which such legislation is en- forced is not fully known. Nonetheless, the pace of enactment suggests a growing awareness of the poten- tial efficacy of the legislative approach. Overall, the public health approach to tobacco control in Latin America and the Caribbean is variable. Many countries have adopted some elements of com- prehensive control, including (in addition to legisla- tion and taxation) the development of national coalitions, the promotion of education and media- based activities, and the development and refinement of surveillance systems. Few countries, however, have adopted the unified approach that characterizes, for example, the program in Canada. The potential exists in the Americas for a strong, coordinated effort in smoking control at the local, national, and regional levels. The high prevalence of smoking that is emerging in many areas is a clear indicator of an approaching epidemic of smoking- related disease. The potential for decreasing consumption in Latin America and the Caribbean has been well demonstrated, albeit by the unfortunate mechanism of an economic downturn. The potential for a decline in smoking prevalence motivated by health concerns has been well demonstrated in North America. Further- more, the importance of tobacco manufacturing and production to local economies is undergoing consid- erable scrutiny. Regional and international plans for tobacco control have been developed and are being implemented. For persons in the Americas in the coming years, the individual decision to smoke may well be made in an environment that is increasingly cognizant of the costs and hazards of smoking. Introduction 11 Chapter Conclusions Following are the specific conclusions from each chapter in this report: Chapter 2. The Historical Context Tobacco has long played a role, chiefly as a feature of shamanistic practices, in the cultural and spiri- tual life of the indigenous populations of the Americas. This usage by a small group of initiates contrasts sharply with the widespread tobacco addiction of contemporary American societies. During the latter half of the nineteenth century, amalgamation of major U.S. cigarette firms coin- cided with the emergence of the cigarette as the most popular tobacco product in the United States. In Latin America and the Caribbean, through a process of denationalization and the formation of subsidiaries, a few transnational corporations now dominate the tobacco industry. The current structure of the industry presents a formidable obstacle to smoking-control efforts. After rapid growth in per capita tobacco con- sumption in Latin America and the Caribbean during the 1960s and 197Os, a severe economic downturn during the 1980s led to a decline in tobacco consumption. In the absence of counter- measures, an economic recovery is likely to insti- gate a resurgence of tobacco consumption. Chapter 3. Prevalence and Mortality 1. 2. 3. 73 Certain sociodemographic phenomena-such as change in population structure, increasing urban- ization, increased availability of education, and entry of women into the labor force-have in- creased the susceptibility of the population of Latin America and the Caribbean to smoking. The lack of systematic surveillance information about the prevalence of smoking in most areas of Latin America and the Caribbean hinders com- prehensive control efforts. Available information reflects a variety of survey methods, analytic schemes, and reporting formats. Available data indicate that the median preva- lence of smoking in Latin America and the Carib- bean is 37 percent for men and 20 percent for women. Variation among countries is considerable, I& Introduction however, and smoking prevalence is 50 percent or more in some populations but less than 10 percent in others. In general, prevalence is highest in the urban areas of the more-developed countries and is higher among men than among women. 4. The initiation of smoking (as measured by the prevalence of smoking among persons 20 to 24 years of age) exceeds 30 percent in selected urban areas. Although systematic time series are not available, the data suggest that more recent co- horts (especially of women) in the urban areas of more-developed countries are adopting tobacco use at a higher rate than did their predecessors. 5. The smoking epidemic in Latin America and the Caribbean is not yet of long duration or high intensity, and the mortality burden imposed by smoking is smaller than that for North America. By 1985, an estimated minimum of 526,000 smoking- attributable deaths were occurring each year in all the countries of the Americas; 100,000 of these deaths occurred in Latin American and Caribbean countries. 6. The estimate of 526,000 deaths annually is conser- vative and is best viewed as the first point on a continuum of such estimates. However, it pro- vides an order of magnitude for the number of smoking-attributable deaths in the Americas. 7. The time lag between the onset of smoking and the onset of smoking-attributable disease is forebod- ing. In North America, a high prevalence of smok- ing, now declining, has been followed by an increasing burden of smoking-attributable mor- bidity and mortality. In Latin America and the Caribbean, rising prevalence portends a major burden of smoking-attributable disease. Chapter 4. Economics of Tobacco Consumption in the Americas 1. Because the health costs of tobacco consumption result from cumulative exposure, they are most pronounced in the economically developed coun- tries of North America, which have had major long-term exposure. Since many countries of Latin America and the Caribbean are experiencing an epidemiologic transition, the economic impact of smoking is increasing. 2. 3. 4. 5. 6. 7. The economic costs of smoking are a function of the economic, social, and demographic context of a given country. In the United States, estimated total lifetime excess medical care costs for smokers exceed those for nonsmokers by $501 billion-an average of over $6,000 per current or former smoker. Similar formal estimates for many Latin American and Caribbean countries are not available. Evidence of the cost-effectiveness of smoking con- trol and prevention programs has increased. In Brazil, for example, the cost of public information and personal smoking-cessation services is esti- mated at 0.2 to 2.0 percent of per capita gross national product (GNP) for each year of life gained; treatment for lung cancer costs 200 per- cent of per capita GNP per year of life gained. In Latin America and the Caribbean, as GNP in- creases, cigarette consumption increases, particu- larly at lower income levels. This effect is attenuated at higher income levels. Advertising tends to increase cigarette consump- tion, although the relationship is difficult to quan- tify precisely. Advertising restrictions are generally associated with declines in consump- tion and, hence, are an important component of tobacco-control programs. The case for promoting increased tobacco produc- tion on economic grounds should be recon- sidered. Although tobacco is typically a very profitable crop, much of the advantage of produc- ing tobacco stems from the various subsidies, tariffs, and supply restrictions that support the high price of tobacco and provide economic rents for tobacco producers. Although the tobacco in- dustry is a significant source of employment, production of alternative goods would generate similar levels of employment. Increases in the price of cigarettes, which are a price-elastic commodity, cause decreases in smok- ing, particularly among adolescents. Excise taxes may thus be viewed as a public health measure to diminish morbidity and mortality, although the precise impact of taxes on smoking will be influ- enced by local economic factors. Although the direct effects of legislation are often difficult to specify because of interaction with a variety of other factors, there are numerous exam- ples of an immediate change in tobacco consump- tion subsequent to the enactment of new laws and regulations. Most countries of the Americas have legislation that restricts cigarette advertising and promotion, requires health warnings on cigarette packages, restricts smoking in public places, and attempts to control smoking by young people. These laws and regulations, however, vary in their specific features. In many areas, the current level of en- forcement is unknown. Chapter 6. Status of Tobacco Prevention and Control Programs in the Americas 1. 2. 3. 4. 5. A basic governmental and nongovernmental in- frastructure for the prevention and control of to- bacco use is present in most countries of the Americas, although programs vary considerably in their degree of development. The need is now recognized, and work is under way, for developing a comprehensive, systematic approach to the surveillance of tobacco-related factors in the Americas, including the prevalence of smoking; smoking-associated morbidity and mortality; knowledge, attitudes, and practices with regard to tobacco use; tobacco production and consumption; and taxation and legislation. School-based educational programs about to- bacco use are not yet a major feature of control activities in Latin America and the Caribbean. The few evaluation studies reported indicate that such programs can be effective in preventing the initiation of tobacco use. Cessation services in most countries of the Amer- icas are often available through church and com- munity organizations. Private and govemment- sponsored cessation programs are uncommon. Media and public information activities for to- bacco control are conducted in most countries of the Americas, but the extent of these activities and their effect on behavior are unknown. Chapter 5. Legislation to Control the Use of Tobacco in the Americas 1. Legislation that affects the supply of and demand for tobacco is an effective mechanism for promoting public health goals for the control of tobacco use. Introduction 13 References PAN AMERICAN HEALTH ORGANIZATION. Regional plan of action for the prevention and control of the use of tobacco. In: Final Reports of the 102nd and 103rd Meetings of the PAHO Executizle Cornmiftee, XXXIV Meeting of fhe Direct- ing Council of PAHO, XL1 Meeting, WHO Regional Committee for the Americas. Official Document No. 232. Washington, DC: Pan American Health Organization, 1989. PAN AMERICAN HEALTH ORGANIZATION. Tobacco or Health: Status in the Americas. Washington, DC: Pan Amer- ican Health Organization. Scientific Publication No. 536, 1992. PUBLIC HEALTH SERVICE. Smoking and Heahh. Report of the Advisory Committee to the Surgeon General of fhe Public Health Se&e, U.S. Department of Health, Education, and Welfare, Public Health Service. PHS Publication NO. 1103, 1964. U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES. Reducing the Health Consequences of Smoking: 25 Years of Progress. A Report of the Surgeon General. U.S. Department of Health and Human Services, Public Health.Service, Centers for Disease Control, Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health. DHHS Publication No. (CIX) 89-8411,1989. 14 Itztroduction Chapter 2 The Historical Context Preface 17 Tobacco Use in Indigenous Societies 29 Introduction 19 Old World Discovery of Leaf Tobacco 19 Methods of Tobacco Ingestion 20 Tobacco Chewing 20 Tobacco Drinking 20 Tobacco Licking 22 Tobacco Enema 22 Tobacco Snuffing 21 Tobacco Smoking 22 Inhaling Airborne Smoke 22 Percutaneous Tobacco Use 22 Transcendental Purpose of Native Tobacco Use 22 The Emergence of the Cigarette, 1492-1900 23 Tobacco as a Cash Crop 23 Tobacco Manufacturing and Trade 24 North America 24 Latin America and the Caribbean 25 The Expansion of Tobacco Manufacturing 26 The Manufacturing of Cigarettes 28 The Popularity of Cigarettes 29 The Emergence of the Tobacco Companies, 1900 to the Present 31 Early Growth and Consolidation 31 The 1903 Cartel 32 The Antitrust Case of 1911 32 Stagnation Domestically and Growth Abroad 33 Diversification 34 International Competition 35 The Current Structure of the Industry 35 Barriers to Entry 40 Profitability 41 The Current Status in Latin America and the Caribbean 42 The Future of Tobacco Control 48 Conclusions 49 References 50 Preface Since prehistoric times, tobacco has been part of the life nnd culture of the people of the Americas and has been a prominent feature of the religious am? healing practices of the region's indigenous societies. During the eras of discozlery, exploration, and national independence, tobacco zoas a major commodity in the growth of trade and the development of an economic base. In more recent times, tobacco use has become intimately entwined with social mores, economic patterns, and, perhaps most importantly, the health of populations in the Americas-as it has in the zuorld at large. The recognitio?z of health efiects is a recent phenomenon in the history of tobacco use. Two main reasons for this recognition have been proposed. First, only in this century has life expectancy increased to the point at which smoking-related diseases begin to hazle a significant imyact. Second, only in this century hasan efficient method of tobacco ingestion-the manufactured cigarette-becomeavailable. This chapter considers the historical development of tobacco use in the Americas-from the prehistoric cultizlation of tobacco to the emergence of the manufactured cigarette and the grozclth of transnational tobacco corporations. Such an overviezo provides a background for understanding the current role of tobacco in the Americas. Historicat Context 17 Tobacco Use in Indigenous Societies Introduction In modern times, tobacco is ingested primarily by burning the tobacco leaf and inhaling the smoke. Tobacco is also chewed or placed, in the form of snuff, in contact with the mucous membranes of the mouth. The predominance of these methods is a fairly recent phenomenon, and the most common delivery system-the manufactured cigarette-has been avail- able for only a little over a century. In the Americas, however, tobacco has been used for millennia, through various routes of administration and for a broad range of social and cultural purposes. The fol- lowing discussion reviews but does not attempt to trace the history of tobacco use in the region's indige- nous societies. Some of the practices discussed are rare or extinct; others are in current use, but all con- tribute to defining the role of tobacco in the cultural and religious life of these societies. Nicotiana is an ancient genus, of which two major species in South America--N. rustica and N. tahacum- produce high yields of the principal alkaloid, nicotine. Many species were present in the Southern Cone of South America in ancient times, but they were largely ignored until about 8,000 years ago, when the chang- ing food supply forced a major shift from hunting and gathering to land cultivation. At that time, popula- tions migrated from the open savannas of southern South America, which were largely unsuited for agri- culture, to the tropical rain forest of the Amazon and areas further north, including the Caribbean. Tobacco became one of the standard crops cultivated by these early farmers. Old World Discovery of Leaf Tobacco European explorers were introduced to tobacco in the West Indies in 1492, when natives offered to- bacco leaves to Christopher Columbus and his men as a token of friendship. After a subsequent exploratory excursion through coastal Cuba, two of Columbus's crew reported having witnessed the custom of cigar smoking (Brooks 1937-1952). The explorers who fol- lowed also recorded tobacco use among the Indians, and these accounts, along with the observations of missionaries, soldiers, travelers, and scholars, are in- tegral to our understanding of the role of tobacco in indigenous cultures. Many explorers learned that tobacco use was addictive and multipurpose, but most of them did not understand why Indians considered tobacco sacred. The plant, it was soon recognized, was used in two main ways. In small doses, it acted as a stimulant, as a hunger and thirst suppressant, and as an analgesic. In such quantities, tobacco was used for social pur- poses, such as sealing friendships; augmenting pala- vers, war councils, and dances; and strengthening warriors. Small amounts of tobacco were also used during ceremonies to ensure fertility; to forecast pro- pitious weather; to predict successful fishing, lumber- ing, and planting; and to ensure congenial courtship. In large doses, tobacco altered states of consciousness and was reported to facilitate spiritual objectives, such as spirit consultations, trance states, and psychic curing. In these excessive quantities, the substance acquired its sacred status. The earliest printed reference to tobacco and the first mention of tobacco smoking is found in the first volume of Gonzalo Fernandez de Oviedo y Valdes's ([1535] 1851-1855) monumental account of the discov- ery of the Americas and the first decades of conquest. He commented on the practice of divinatory tobacco smoking by shamans and the methods of tobacco cultivation among the Caquetio Indians of northern Venezuela. He also reported in 1549 that the Nicoya Indians of Nicaragua used ceremonial cigars and that Spanish soldiers had been offered reed cigarettes by Maya Indians off the coast of Yucatan (Robicsek 1978). During his travels in 1541 to 1555, Girolamo Benzoni reported that the shamans of Hispaniola and certain Central American provinces poisoned them- selves with tobacco smoke during a curing seance. In the process, some men fell to the ground as if dead and remained "stupefied for the greater part of the day or night" (Benzoni 115651 1967, p. 97). After becoming coherent, these shamans would tell of their visions and encounters with the gods. Other explorers witnessed cigar smoking on the coast of Brazil. In 1555, the Franciscan friar Andre Thevet (115571 1928) made contact with the Tupinamba Indians in Brazil. He reported their use of cigars to suppress hunger and thirst and during coun- cil deliberations. Thevet's report and similar information by Hans Staden (115571 1928) were confirmed by Jean de Lery (1592) who reported smoking and another mode of tobacco use-ritual tobacco blowing-among the Tupinamba. Using long canes, chiefs blew tobacco smoke on theeheads and faces of participants Historical Context 19 circumambulating during war dances--purlx)rtcdIy to impart the spirit and fortitude required to olrercomc enemies. Canes may also have been used by the Tupinamba as tubular pipes. A few years earlier, Jacques Cartier (1545) had found L-shaped pipes in use among the Iroquois of Hochelaga (Montreal). Another method of tobacco consumption was reported among the Taino Indians of the Greater An- tilles. This tribe reportedly used a forked tube to inhale tobacco smoke (Fernandez de Oviedo y Valdes [1535] 1851-1855). The Catalonian friar Ramon Pane ((15111 1974) referred to a similar tube used by the Indians; however, it was used to inhale psychotropic snuff (cohoba) (D'Anghiera 1912). The tube may have been used by the Taino for both purposes. Amerigo Vespucci reported the custom of leaf chewing among Indians (de Navarrete 1880). Vespucci might have observed tobacco chewing with lime, but he did not identify the type of plant material. The custom of chewing whole coca (Erythroxylon) leaves with powdered lime was widespread along the Carib- bean coast of South America at the arrival of the Euro- peans, and it persists today (Plowman 1979). At the time of European discovery, chewing tobacco powder with ashes or pulverized shell was also common among the Carib Indians of the Lesser Antilles and the northeastern mainland of South America. Methods of Tobacco Ingestion The discussion of traditional tobacco use that follows is based on sources that span several hundred years. Some methods are still practiced and some are not. To avoid the confusion of shifting between past and present, the present tense is used (the ethno- graphic present) to allow a cross-sectional view of tobacco use by indigenous societies. Although this approach conveys a sense of immutability, some methods of tobacco use have undergone considerable change. Some mention is made of tobacco use among North American indigenous societies, but the discus- sion focuses on South American practices. The infor- mation presented is based on Wilbert (1987),1 except where other references are cited. Gastrointestinal, respiratory, and percutaneous routes of ingestion have been documented among South American Indians. Intravenous administration has not been reported. The reported methods of ingestion comprise chewing tobacco quids, drinking tobacco juice and syrup, licking tobacco paste, administering tobacco suppositories and enemas, using snuff, smok- ing, inhaling airborne tobacco smoke, and applying tobacco products to the skin and the eyes. Tobacco Chewing The chewing or, more precisely, sucking Of to- bacco quids is widely practiced in South America and the West Indies. The widespread distribution of to- bacco chewing is considered indicative of the antiq- uity of this method (Zerries 1964). The practice has been observed in the Lesser Antilles and eastern Ven- ezuela and from northwestern Colombia and the upper Amazon to the Montana-to-Gran Chaco region (an area encompassing parts of Bolivia, Paraguay, and Argentina) as well as in eastern Brazil. In North Amer- ica, tobacco chewing was practiced by Indians of the Pacific Northwest. With periodic fluctuations, to- bacco chewing has found wide acceptance in non- Indian societies as well (U.S. Department of Health and Human Services [USDHHSI 1986; National Can- cer Institute 1989; Connolly et al. 1986). Indians in South America prepare wads or rolls for chewing from green tobacco and sometimes dust the wet leaves with ashes or salt and mix them with certain kinds of soils or honey. They also use tobacco pellets prepared by kneading finely chopped green tobacco leaves mixed with nitrous earth into a dough or by mixing finely crushed tobacco leaves with ashes and wetting the powder with water to produce a smooth paste. Guianese Indians bake a cake of fresh tobacco leaves that is sprinkled with salt or a surrogate obtained from o~llin IMourem flrrzliatilis). Strips of the cake are stored in gourds, and crrmfin (resin; Protium Izrpfaplzyllum), pepper (Capsicu,n sp.), medicinal herbs, or lime from sea shells may be used as additives. Tobacco quids, rolls, or pellets are carried by the user in the cheek or between the gum and the lower lip for protracted periods (Hammilton 1957). Tobacco chewing frequently occurs in conjunction with other methods of administration, such as smoking and snuffing, and tobacco is sometimes chewed with coca. Indians generally swallow the trickling juices rather than expectorate them (Bray and Dollery 1983). Tobacco Drinking Along with chewing, ingesting tobacco in liquid form may be the oldest method of tobacco use (Sauer 1969). The ethnographic distribution of tobacco For a broader discussion of the general topic and for more extensive documentation, consult Wilbert, J., Tobacco and Shamanism in South America, In: Schultes, R.E., Raffauf, R.F. (eds.) Psychoactiz~e Plants of the World. New Haven, Connecticut: Yale University Press, 1987. See also the papers in the Joztrna2 of Ethnopharmacology (Elsevier Scien- tific Publishers) (Wilbert 1990) and in the proceedings published by Birkhtiuser Verlag (Wilbert 1991). 20 Historical Context drinking is similar to that of tobacco chewing, al- though it is not reported in the Gran Chaco. Most of the tribes in greater Guiana and many societies of the upper Amazon and the Montana of Ecuador and Peru drink tobacco juice. Tobacco drinking has also been reported in northwestern coastal Venezuela, north- western Colombia, and a few scattered places in Bolivia and Brazil. Tobacco drinking has found little accep- tance as a method of tobacco use outside South America. The Indians in these regions prepare tobacco juice in various ways. In greater Guiana, tobacco juice is usually an infusion of whole or pounded green leaves in water. The steeped or boiled leaves are strained and pressed by hand. Some tribes add salt or oulin ashes to the mixture (see "Tobacco Chewing"). Other botanical materials used as ingredients by Gui- anese tribes include the tree barks nylrcg and cinchona. Upper Amazon and Montana tribes similarly steep, press out, and stir tobacco leaves in water, although these tribes frequently mince or masticate the leaves and occasionally add pepper (Cn@~nz sp.). Boiling tobacco leaves in water for the preparation of juice more frequently occurs among the tribes of the upper Amazon and the Montana than among Guianese tribes. Unlike umbil paste, a syrup extract or jelly from which the water is completely evaporated, the juice is left viscous enough to allow for drinking. Tobacco juice is ingested by mouth or through the nose, using cupped hands or gourds. The concen- trate may also be squirted directly from mouth to mouth. Tobacco drinking is often accompanied by the consumption of tobacco in other forms, alcoholic bev- erages, and certain hallucinogenic substances. Tobacco Licking Licking of ambil is limited to the tribes of the northernmost extension of the Andes in Colombia and Venezuela, parts of the northwest Amazon, and a few areas of the Montafia. Ambil is prepared differently from region to re- gion. Indians in the Sierra Nevada de Santa Marta of Colombia boil tobacco leaves for hours or days and thicken the black gelatin extract with maniac starch (MunihotesctlZenta)orarrowroot (Muruntaarundinacea). Venezuelan tribes east of Lake Maracaibo mix w-m, a sesquicarbonate of soda, into ambil (Kamen-Kaye 1971), whereas the Montana tribes make ambil with salt or alkaline ashes. Pepper (Cupsicum sp.), avocado seeds (Perseu americana), crude sugar, tapioca (maniac juice), and maniac starch are also occasionally used as ingredients for ambil. A small quantity of ambil is rubbed across the teeth, the gums, or the tongue. Ambil is sometimes ingested with other tobacco products, and some tribes of the Montana consume ambil with coca, ayahuasco (Bunisteriu cuupi), and possibly other hallucinogens. Tobacco Enema Use of tobacco enemas and suppositories, as a remedy for constipation and helminthic infestations, is reported among South American Indians. The Ship- ibo of Peru apply a mixture of tobacco juice and ginger as a vermifuge (Gebhart, unpublished). Ritual use of tobacco enemas among the Aguaruna Indians of the Peruvian Montana has recently been reported (Davidson, unpublished). To promote intoxication, South Amer- ican Indians apply enemas of ayahuasco, purica' (Virolu sp.), willka fA~zndenunthera colubrinu), and tobacco (Nicotiurzn sp.) (Roth 1924; Von Nordenskiold 1930). Use of medicinal or ritual tobacco enemas has not been reported among Caribbean, Central American, or North American Indian populations. Tobacco Snuffing The use of tobacco snuff, although secondary to the use of psychotropic snuff in South America, is documented in several regions. Ethnographic sources indicate that tobacco snuffing is customary in the mid- dle and upper Orinoco River, the northwest Amazon, and the Montana-the Purus, the Guapore, and the Andean regions. The practice has also found wide acceptance in the non-Indian world, although interest has fluctuated. To prepare tobacco snuff, Indians dry tobacco leaves and then crush, pulverize, and often sift them. Snuff may be inhaled directly from the hand or a leaf or, more commonly, through a snuffing tube made of cane or hollow bone. Snuffing powders are some- times administered by a partner. Tobacco Smoking Smoking is the most prevalent form of tobacco consumption in native South America and is particu- larly common in greater Guiana, the upper Amazon, the Montaiia, Las Yungas, Mato Grosso, and the Gran Chaco. Smoking has also been reported in many in- tervening and peripheral areas, such as central and northern Colombia, the middle and lower Amazon, the coast of Brazil, Patagonia, and southern Chile. North American Indians, except for the Pueblo and certain tribes in California, were exclusively pipe smokers (Linton 1924; Robicsek 1978). In South America, pipe smoking has prehistoric origins and is still widely distributed throughout the continent. It is prevalent in two focal areas-the Maraiion-Huallaga-Ucayali region and the Gran Chaco. The practice is scattered Historical Context 22 along the north coast and the Guiana hinterlands, along the Amazon, and in coastal Brazil. Pipe smok- ing also occurs farther inland and north of the Gran Chaco focal area-in central and southern Bolivia and on the lower Araguaia. South of the Chaco, pipe smoking is found in middle and southern Chile and in Patagonia. South American Indians smoke tobacco in the form of cigars, cigarillos, and cigarettes, and they use tubular or L-shaped pipes made of reed, bamboo, wood, fruit shells, bone, clay, or stone. They inhale deeply and hyperventilate; rarely do they retain a puff of smoke in the mouth before expelling or swallowing it. The process is described as taking the smoke into the lungs with "great sucking gasps" and "working the shoulders like bellows" (Huxley 1957, p. 195). The Warao Indians of the Orinoco and several other tribal societies, such as the Vaupes Indians, hyperventilate by smoking giant cigars that measure nearly one- meter long and two-centimeters wide (Wallace llSS91 1972). Certain customs may be associated with smok- ing. For example, cigars are usually rolled by Indian men, but in some Indian communities, women are expected to roll the cigars. Women may then light the cigars and take a few puffs themselves before handing the cigars to the men. Smoking is often accompanied by the ingestion of hallucinogens and stimulant bev- erages, such as guarana (Pudliniu cupunu var. sorbilis) and cassiri. Tobacco is prepared for smoking by sun- or air- drying the leaves and crushing them; some societies alter the product with additives. To give cigar or pipe tobacco a pungent odor similar to frankincense, Indi- ans of Guiana and Amazonia add the resin of Protim heptuphy~lum, a tree of the myrrh or Burseraceae fam- ily. Cararia powder or granules are mixed with to- bacco to give it a balsamic savor (Schultes 1980). In Patagonia, culufufe shavings (Berberis sp.) are mixed into the tobacco to add an acrid taste and to create a very blue smoke when the tobacco burns. To make cigars, cigarillos, and cigarettes, South American Indi- ans use several types of wrappers. Although whole tobacco leaves or pieces may be used, various kinds of tree foliage, palm stipples, banana leaves, and maize husks are more common. The wrappers usually add flavor and odor to the tobacco, and in some instances, observers have noted that the cover leaves may en- hance the narcotic effect (Weyer 1959). Inhaling Airborne Smoke The intentional inhalation of environmental to- bacco smoke is a peculiarly South American method of respiratory absorption of nicotine. This practice occurs on the east coast of Brazil, where religious practitioners blow tobacco smoke from canes and funnel- shaped cigars onto the heads and into the faces of dancing warriors. Men of this region also inhale the smoke of tobacco leaves burning inside effigy rattles. Cuna elders of Panama have cigar smoke blown into their faces, and Jivaro men of Peru blow tobacco smoke through long tubes into the open mouth of a partner. Percutaneous Tobacco Use The administration of tobacco products to intact or abraded skin is widespread in native South Amer- ica and includes the following practices: general and directed smoke blowing; spit blowing of tobacco juice, nicotine-laden saliva, or tobacco powder; and admin- istration of saliva massages, juice ablutions, and snuff and leaf plasters or compresses. Some of these prac- tices may serve therapeutic purposes. Tobacco smoke and juice may also be applied to the eyes for absorp- tion of nicotine by the conjunctiva. Transcendental Purpose of Native Tobacco Use Tobacco is traditionally used as a vehicle for transcendental experience by South American indige- nous societies. As such, it is central to the religious rites of these populations and is a primary tool of the shamans, or spiritual leaders of these societies. To- bacco features in the initiation rituals of the shamans and is used throughout their careers as a mechanism for exercising power and maintaining credibility. A fundamental role of the shamans is to serve as spiritual protectors who defend their societies against a host of intangible adversaries. Thus, a society's per- ception of the shaman as being supernatural as well as human is integral to the shaman's position. This dual nature is conferred during initiation rituals in which the novice undergoes a tobacco-induced deathlike state associated with temporary respiratory depres- sion (Dole 1964). Revival from this condition is equated with a rebiih that imparts otherworldly powers. During initiation, the novice ingests increasing amounts of tobacco and achieves acute intoxication. The candidate manifests a state of illness through nicotine-mediated nausea, heavy breathing, vomiting, and prostration. Through tremors, convulsions, or seizures, the novice progresses to acute narcosis and apparent death. The physiologic stages through which the novice passes depend on the rate of bio- transformation of nicotine in the body (Larson 1952; Larson, Haag, Silvette 1961). The induction master's ability to interpret physical signs is critical. 22 Historical Context In Guiana, for example, shamans make initiates drink liters of tobacco juice, which bring them to the brink of death. Several cupfuls of tobacco pulp are ingested in rapid succession, and a large bowl of liquid tobacco is force-fed through a funnel into the mouth of a swooning candidate. Initiates who fail to vomit part of the brew may convulse, become ill over an extended period, or die. Shamans must continually demonstrate their spiritual power to themselves and to the community to maintain effectiveness as religious practitioners and healers (Reichel-Dolmatoff 19751. The pharmacologic effects of nicotine help them accomplish that goal. South American shamans reportedly ingest giant ci- gars while simultaneously chewing tobacco during ceremonies. Participants in certain rituals and shama- nit curing seances on the Guapore River (Brazil) have been observed taking dozens of insufflations of to- bacco powder and ingesting up to 60 doses of rap6 (snuff). Aguaruna vision seekers of Ecuador use to- bacco enemas to produce a deathlike state. Shamans blow tobacco smoke and spittle against atmospheric enemies, such as thunder and lightning, that threaten human existence. In many societies, shamans exercise power in the form of aggressive "were-jaguars," another condition accomplished through tobacco ingestion. Nicotine is used to provoke several physical changes, including a deep raspy voice, a furred tongue, and a fusty body odor. Nicotine also activates cholinergic pregangli- onic fibers of the sympathetic nervous system to stim- ulate the adrenal medulla to release epinephrine and norepinephrine, which mobilize the shaman's body for emergency reaction (USDHHS 1988; Schievelbein and Werle 1967). This generalized arousal is interpre- ted by the properly initiated shaman as characteristic of jaguar-men, and this experience confirms his shamanic status and role. The use of tobacco for transcendental purposes in indigenous societies contrasts with its subsequent use in other American societies. In modern Latin American and Caribbean societies, tobacco is increas- ingly consumed for the social enjoyment of the stimu- lant rather than for the toxic and organoleptic effects of nicotine sought by the Indians. Acute intoxication, and its attendant immediate threat to health, has giv- en way to long-term addiction and chronic health consequences. The Emergence of the Cigarette, 1492-1900 Tobacco as a Cash Crop Europeans did not follow native tobacco prac- tices but developed a tobacco culture of their own based on trade. One of the earliest references to tobacco trade appears in Diego Columbus' will (dated 15341, which mentions a Lisbon tobacco merchant. The French ambassador to Portugal presented tobacco purchased in Lisbon to Queen Catherine de Medici of France in 1561, and a Spanish physician may have introduced tobacco to the court of King Philip II of Spain around 1560 (Fairholt 1185911968). Tobacco was first brought to England by Sir John Hawkins about 1565, and England soon had a large and fast-growing market (Anonymous 1602). Within 30 years of Columbus's voyages, a to- bacco trade had been established by the Spaniards between the Caribbean and India, and trade later de- veloped with Japan, China, and the Malay peninsula (Robert 1967). Spanish tobacco, grown mostly in the Caribbean, dominated the market in the early six- teenth century. Sales of tobacco products became so lucrative that, in 1557, the Havana (Cuba) city council forbade black women from engaging in the tobacco trade, thus retaining trade for Europeans (Ortiz 1947). Tobacco growing thrived in parts of Latin America as well, especially in areas of Venezuela (Caracas, Cumanb, and Margarita). Although the Spaniards attempted to monopo- lize the tobacco trade, many growers smuggled the leaf to Dutch and English ships. To curtail the contra- band trade, King Philip II banned tobacco planting in most of the Spanish Colonies in Latin America from 1606-1616, a policy that stimulated England's search for its own source of tobacco (Robert 1967). Sir Walter Raleigh first smoked tobacco in the Virginia colony in 1585, and John Rolfe introduced N. tabuctlm to the colony about 1611. Tobacco, a much- needed cash crop for the struggling Jamestown settle- ment, was exchanged for imported manufactured goods, and the colony soon became economically via- ble. Tobacco was taken to the Maryland settlements, where the soil produced a yellow tobacco known as Bright (Tilley 1948). According to Rolfe, Bright was "as strong, sweet, and pleasant as any under the sun," Historical Context 23 and with additional "trial1 and expense," it could com- pete with leaf grown in the West Indies (Morton 1945, p. 119). Maryland emerged as an important tobacco producer, and attempts to cultivate the crop in North Carolina also proved successful. The first shipment of tobacco from Virginia reached London in 1613. Within three years, tobacco became the most significant crop and chief export of the British Colonies in North America (Tilley 1948). Tobacco was sold for its weight in silver, which en- couraged production, exportation, and taxation (Wagner 1971). Thus, tobacco production became centered in the North American colonies, and the purchase of tobacco became an expensive indulgence. Tobacco cultivation in Virginia allowed England to begin freeing itself from the Spanish tobacco trade. By 1614, high-quality Virginia tobacco was considered comparable to that grown in Trinidad (Bruce 118951 1935). During 1615 to 1616, the Virginia Colony ex- ported 2,500 pounds of tobacco, all but 200 pounds of which were sent to England, but the English imported 58,300 pounds from Spain (Brooks 1937-1952). This importation greatly concerned the English govern- ment because it created both a trade imbalance and an outflow of currency (Jacobstein 1907). In 1621, as the supply of Virginia tobacco increased, Parliament ter- minated importation of Spanish tobacco, which by then cost England E60,OOO (Jacobstein 1907). But not all Europeans were in favor of tobacco use. Some Europeans used tobacco for medicinal pur- poses, perhaps in imitation of South American Indi- ans, but other Europeans believed that the use of tobacco was a heathen practice to be strongly discour- aged. Many people claimed that smoking and chew- ing tobacco were harmful to health. The most fa- mous attack on tobacco appeared in 1604, when King James I anonymously issued A Courltrr-B&c fo Tobacco, in which he disclaimed any medicinal value of tobacco and described smoking as a loathsome practice (James I 116041 1954). The King imposed a 400 percent tariff (McCusker 1988), but the tax had little impact on tobacco use, perhaps because demand was greatest among the upper classes. By the early seventeenth century, smoking and chewing tobacco were prevalent throughout most of Europe. In London in 1614, to- bacco could be purchased at 7,000 establishments (Lehman Brothers 19551, and because of its presumed medicinal value, tobacco was commonly prescribed by physicians and made available at apothecaries. In the New World, a sixpence fine was set for smoking in public in New Haven, Connecticut, in 1646, but in the following year, the Connecticut general court ruled that citizens could smoke or chew if they had a license from the court, unless they already had a doctor's prescription (Heimann 1960). Concerns about tobacco faded, and attempts were made to grow tobacco in Europe. But climate and soil contributed to an unsatisfactory leaf. In the seventeenth century, attempts to produce tobacco were also made in Russia, Persia, India, Japan, and parts of Africa (Morton 1945); however, during this period, Europeans could obtain a sufficient supply of tobacco through importation from the New World only. Tobacco Manufacturing and Trade North America In the Navigation Acts (1651 to 16731, the English parliament stipulated that all tobacco products from the colonies had to be shipped to England before being shipped elsewhere. The Acts were difficult to enforce, however, and resulted in a policy of benign neglect. But the passage of the Acts caused prices to rise sharply. Since tobacco production in the Virginia Col- ony was low, increased prices encouraged a prolifer- ation of small farms in North America and, eventually, large tobacco plantations. The shortage of workers for these plantations spurred the slave trade, which in- creased the labor supply. Annual tobacco shipments from the colonies in- creased significantly-from approximately 65,000 pounds in the early 162Os, to 1 million pounds by the late 163Os, to 20 million pounds in the late 1670s (Kulikoff 1986). By 1699, of the 30,757,OOO pounds of tobacco exported to England from its North American colonies, all but 113,000 pounds were produced in Virginia and Maryland; 496,000 pounds were im- ported by England from other areas, including Eu- rope, Turkey, Africa, and the Caribbean. During the next 75 years, imports from other areas declined, de- spite several sharp increases (Table 1). Reexportation of tobacco increased steadily during the first half of the eighteenth century and then peaked at 74,000 pounds in 1775 (U.S. Department of Commerce [USDOC] 1975). Tobacco became the most important cash crop of the British Colonies. Labor for tobacco production was worth six times that used for wheat production (Jacobstein 1907), and in 1770, the total value of to- bacco legally exported from the colonies (E906,638) was significantly greater than that of flour or rice (!Z504,553 and E340,693, respectively). Fifty percent of all British colonists obtained their living from tobacco production (Jacobstein 19071. In Maryland, wages 24 Historical Corztexf Table 1. Tobacco trade* in England, 1700-1775 Year 1700 1705 1710 1715 1720 1725 1730 1735 1740 1745 1750 1755 1760 1765 1770 1775 Imported from North American Other colonies countries Reexported+ -~ ~~~~~ 37,607 233 15,629 32 - 23,472 26 16,000 17,801 8 15,000 34,516 10 21,034 12 16,000 34,949 131 33,000 40,068 1 35,896 106 42,000 41,063 10 43,000 51,278 61 48,867 217 45,000 52,288 59 64,000 48,317 3 68,000 39,184 4 73,000 55,458 510 74,000 Source: U.S. Department of Commerce (197J). *In thousands of pounds. `Reexportation exceeded importation in the later years because of tobacco grown in the British Isles. were often paid in tobacco, which also functioned as a currency WSDOC 1975). In England, all companies involved in the tobacco industry also profited enor- mously, including those that provided banking and related services to planters. In the 158Os, the Spaniards developed and ex- panded the plantation system in the Caribbean but emphasized sugar production (Brooks 1952). Foreign- ers began to enter the sugar industry, which required extensive capital, but tobacco production was domi- nated by local businesses. By 1606,95 farms in Cuba specialized in tobacco (Andrews 1978). Little is known, however, about the industry in Cuba during this period, perhaps because Cuban farms grew the expensive and delicate tobaccos used in cigars and were quite small compared with the Virginia planta- tions (Ortiz 1947). The competitive advantage for the Cuban growers may have been that the leaf used for Cuban cigars produced a richer flavor with less nico- tine than did the Bright leaf grown in the Chesapeake Bay area. During shipping, tobacco lost much of its mois- ture, and it had to be moistened before handling. To prepare tobacco leaves for smoking, the stems and ribs were removed and additives, such as sugar, glycerine, gum, and starch, caused the leaves to ferment. The leaves were either granulated for smoking or snuffing or pressed into plug for chewing. The different addi- tives provided tobacco with distinct flavors. These flavors and the various shapes of plugs (including thick coil, pigtail, black twist, and Irish) offered the customer a wide selection in tobacco. Generally, the moister the plugs, the less expensive. up to 120 pounds of plug could be manufactured from 100 pounds of tobacco, and carotte, an extremely moist variety, could yield 150 pounds of plug (Alford 1973). But even before the American Revolution, the In 1717, a tobacco monopoly was granted to colonies had problems maintaining a steady level of Martin Arostegui by royal edict. Tobacco manufac- tobacco production. Tobacco depleted the soil, which turing was forbidden in Cuba, and raw leaf had to be resulted in lower yields per acre over time. Tobacco sent to Spain (Stubbes 1985). As a result, tobacco growers faced a dilemma: maintaining their level of farmers revolted in 1717,1718, and 1723. The monopoly income required expanded planting, but a larger crop lasted for a century, however, and despite its adverse In the Chesapeake Bay area, the choice was be- tween cotton and tobacco, and tobacco became more important. In Cuba, the choice was between sugar and tobacco, and tobacco became the less important crop (Ortiz 1947). Nevertheless, by 1711, a processing center was established in Havana to prepare tobacco leaf for shipment. In 1734, the center processed 3 million pounds of tobacco, one-third of which was of the best quality and was used to make snuff (Bray and Harding 1974). would also depress prices. Average price per pound for Maryland tobacco was already fluctuating sharply: one pence in 1713, 0.71 pence in 1714, 1.19 pence in 1720, and 0.65 pence in 1731. A general slump was followed by a steadily rising price per pound: 1.48 pence in 1752 and 2.23 pence in 1769. However, prices again declined in 1773 to 1.13 pence per pound (USDOC 1975). Some Virginia planters seriously con- templated abandoning tobacco in favor of wheat, and some did stop cultivating tobacco (Breen 1985). Because of their increasing indebtedness to Brit- ish merchants, most tobacco growers in the Bright Belt supported the American Revolution (Breen 1985). Thomas Jefferson wrote that these debts "had become hereditary from father to son, for many generations, so that the planters were a species of property, an- nexed to certain merchants in London" (Heimann 1960, p. 76). The American Revolution terminated the Navigation Acts but did not alter the adverse circum- stances that many planters still faced. Latin America and the Caribbean Historicnl Corztext 25 effect on business, the tobacco trade continued to pros- per (Ortiz 1947). From 1789 to 1794, Cuba produced about 6.25 million pounds of tobacco per year. A decline followed, due to imperial interference, the increasing cost of land, and the preference given to sugar and coffee production. By 1804, Cuba was obli- gated to import 1 million pounds of tobacco from the United States to meet the requirements of the Havana retail trade. Not until the Spanish government re- lented did the industry revive enough for Cuba to dominate the market for tobacco leaf and fine cigars in the 1830s (Turnbull [18401 1973; Humboldt [18561 1969). Tobacco cultivation also flourished in Brazil, de- spite condemnation by the Roman Catholic Church and early Portuguese demands to use the land to grow food. However, these obstacles were overcome be- cause the sale of tobacco could provide ready funds for purchasing slaves to work in the sugar cane fields. Tobacco sales became a state monopoly in Brazil in 1624, but sales were so profitable that the government yielded to private interests and abolished the monop- oly in 1642. In 1659, the government reestablished the monopoly, which by 1716 earned 1.4 million crusades a year. Tobacco exports from Bahia averaged 375,000 pounds per year, and annual sales of Brazilian tobacco in London in the early eighteenth century were esti- mated at 1.9 million crusades (Randall 1977). The Expansion of Tobacco Manufacturing During the American Revolution, tobacco ex- ported from the British Colonies declined sharply-to approximately 15 million pounds per year. Subse- quent wars also contributed to the loss of foreign markets. Sales declined significantly during the Na- poleonic Wars and the War of 1812 due to English blockade of American ports. In addition, revenues to cover the cost of these wars were raised by increasing excise taxes. In 1794, a tax was levied on manufac- tured tobacco to help cover the cost of the national government, but the tax was discontinued two years later. It was reintroduced to help defray the costs of the War of 1812 and remained in effect until 1816. England increased the tax on tobacco imports in 1815 from 28 cents to 75 cents per pound, which resulted in decreased consumption-from 22 million to 15 mil- lion pounds (Jacobstein 1907). During the American Revolution, Europeans ac- celerated importation of tobacco from Latin America and the Caribbean and attempted to increase tobacco production elsewhere. Cuba, Colombia, Austria, Germany, and Italy were among the more active participants, but Sumatra also became a significant source of tobacco for Europe. By 1841, European pro- duction was estimated at 137 million pounds, com- pared with 219 million pounds in the United States. Europeans continued to purchase American tobacco, and in 1860, half of the total U.S. production of approx- imately 400 million pounds was shipped to Europe (Jacobstein 1907). But taxation and the loss of some foreign markets contributed to a lower price for tobacco, which made cotton production more attractive to U.S. farmers. The United States was the world's leading cotton pro- ducer, with no competition from Europe. Yet, several factors contributed to the perpetuation and evolution of tobacco cultivation, curing, and trade. By law, be- fore the American Revolution, only England could manufacture plug, snuff, cigars, and pipe tobacco. After gaining independence, Americans were free to manufacture these more profitable tobacco products, especially pipe and chewing tobaccos, which in addi- tion to capturing the domestic market, became in- creasingly popular in Europe. In North Carolina, tobacco became even more attractive because of an accident that changed the product. In 1839, a slave fell asleep while curing Bright tobacco. He awoke in time to see the embers dying and threw more charcoal on the fire to revive it, not realizing that the sudden heat would alter the process. What emerged was a brilliant yellow tobacco with a sweet, pleasant taste. This new curing method produced a slightly acidic tobacco unlike the more alkaline old Bright. The new tobacco was quickly adapted for use as a wrapper for many kinds of plug, which increased the popularity of this form of tobacco. The Bureau of the Census called this alteration "one of the most abnormal developments in agriculture that the world has ever known" (Sobell978, p. 16). Cigar leaf was grown throughout the Caribbean, the first significant center for export of cigars to Amer- ica and Europe. Cigars were first introduced in the United States in the late eighteenth century, and in 1804, more than 4 million Cuban cigars were imported (Brooks 1952). Cigars were first smoked in the south- ern colonies, and the practice soon moved north. During the American Revolution, cigar manu- facturing facilities were established in Philadelphia, Trenton, and New York, which became the centers for American cigar manufacturing. In 1800, cigar facto- ries were also built in New Orleans; these factories produced cigars that resembled Cuban products. In 1810, a Suffield, Connecticut, cigar manufacturer employed a Cuban cigar roller to teach his craft to the American workers, and soon small cigar facto- ries became widespread throughout the Northeast 26 Historical Context (Heimann 1960). In 1831,50 Cuban cigar rollers relo- cated to Key West, Florida, where they successfully transplanted the business (Ortiz 1947). During this period, trade was primarily local; most towns had at least one cigar factory (Heimann 1960). Many kinds and shapes of cigars were smoked during the early nineteenth century. The most expen- sive were the Havanas, made either in Cuba or in American factories that imported Cuban leaf. La Co- rona was made exclusively with Havana leaf. The most popular shape of La Corona was the Perfecto, a large cigar that tapered from the middle. The Panatella was a long, straight cigar, open at the end that was to be lit. The Parejo was similar, but open at both ends. Cigars other than La Corona included the Oscuro, which was made from a much darker leaf; Maduro, made from a brown-black leaf; Maduro Col- orado, made from a dark brown leaf; Colorado Claro, made from a light brown leaf; and several others (Cabrera Infante 1985). In the early nineteenth century, Connecticut- grown tobacco was used to make cheap cigars (Akehurst 1968). Cigars manufactured with domestic leaf often used flavored Bright and Virginia tobacco with wrappers from Connecticut-grown tobacco. These cigars were called Conestogas, after a type of covered wagon, or "stogies" for short. Long Nines were 9 inches (3.5 cm) long and pencil-thin. Short Sixes were 6 inches (2.4 cm) long and less expensive. Prices varied from two cigars for a penny to as much as a 10 cents per cigar (Heimann 1960). Pipe and chewing tobaccos were inexpensive compared with the finer, more costly tobacco used for snuff and ci- gars, and pipe smoking was the most popular form of tobacco smoking during the first half of the nineteenth century. Persons of low-income groups used pipes and plug, while persons of high-income groups used snuff and cigars (Robert 1967). After the Louisiana Purchase was made in 1803, settlers brought the tobacco culture to the West. By 1830, the western United States produced approxi- mately one-third of the nation's tobacco used for plug and pipes (Wagner 1971). The southern states also produced tobacco for plug and pipe smoking and continued to produce most of the tobacco for snuff. Virginia, North Carolina, and Ohio led production (57 million, 12 million, and 10.5 million pounds, respec- tively). However, the cultivation of tobacco for cigars remained concentrated in the Northeast. By 1849, Connecticut, Pennsylvania, and Massachusetts were producing large amounts of cigar leaf (1,267,624; 912,651; and 138,246 pounds, respectively) (Jacobstein 1907). Just before the Civil War, $1.4 million worth of cigars was produced in Philadelphia and $1 .l million in New York City. Before the war, the total value of manufactured cigars was $9 million; the value of to- baccos for chewing and pipe smoking was $21 million (Heimann 19601. The popularity of tobacco, combined with in- creasing urbanization, encouraged some merchants to enlarge their manufacturing activities and aggres- sively market their products. The first center of activ- ity for pipe and plug tobacco was Richmond, Virginia. In 1830, James Thomas, Jr., one of the earliest manufacturer-merchants of Richmond, opened his factory and distributed plug tobacco to many parts of the country. Thomas relocated in California during the gold rush of the 1840s and soon established an almost total monopoly on pIug sales in the territory by shipping the manufactured product from his eastern factories. By 1860, approximately 50 factories in Rich- mond manufactured tobacco; these firms employed 3,400 workers and produced goods valued at almost $5 million per year (Robert 1967). Lorillard was perhaps the largest tobacco manu- facturing facility during the first half of the nineteenth century. Pierre Lorillard had opened a snuff factory in Manhattan in 1760 and owned one of the two mills that survived British opposition to colonial produc- tion After the American Revolution, he constructed a new mill on the Bronx River, which expanded into warehouses, a facility for packing snuff and smoking tobacco, workers' quarters, and his own home. The company outgrew this complex, and Lorillard opened a new facility across the Hudson River in Jersey City (Heimann 1960). Tobacco products were not highly differentiated until the mid-1800s. Lorillard was one of the first to appreciate the significance of marketing. After the Civil War, his company began to affix tin tags to its plugs, which distinguished a Lorillard product from others; one Lorillard brand was called Tin Tag. Other manufacturers followed suit, and soon the tin tags were collected as novelties, just like cigarette cards in later years (Heimann 1960). The use of brand names for plug products became common in the 1840s and were used to differentiate products by additives, fla- vorings, and varieties of tobacco (Robert 1967). Because financial centers were located in the North, tobacco financing was easier to obtain by man- ufacturing firms concentrated in that part of the coun- try. By the 185Os, much of Virginia's crop was sent to New York firms on consignment; these firms then sold the crop to wholesale jobbers. These firms were so well established that southern manufacturers and retailers were obliged to use the northern firms. This dependence served as another irritant between the North and South before the Civil War. Indeed, the system of U.S. tobacco manufacturing in the 1850s strongly resembled that of the 1770s when colonial tobacco farmers chafed at Britain's stranglehold. The financial panic of 1857 did much to inflame relations further since many New York manufacturers de- faulted on their financial obligations, which caused seven of the eight Richmond tobacco manufacturers to suspend operations (Wagner 19711. The Civil War had far-reaching effects on the tobacco industry. In the South, the cotton farmers fully supported the Confederacy, but the tobacco farmers were divided in their loyalties. Virginia, North Carolina, and Tennessee seceded from the Union, but Maryland, Kentucky, and Missouri re- mained. During the war, tobacco production in Ken- tucky surpassed that in Virginia. Some southern tobacco was smuggled through the lines, but Confed- erate planters clearly suffered during this period. Farmers in the Bright Belt continued to plant and harvest tobacco despite the war. Because of the Union blockade of Confederate ports and fear of invasion, tobacco supplies were moved from Richmond to Dan- ville, Virginia, which became a major center of the tobacco industry. Durham, North Carolina, also grew in importance and, in time, outranked Richmond as the leading manufacturer of plug. In 1862, to stimulate production of much-needed foodstuffs, the Confederate government prohibited cotton and tobacco cultivation, a moot policy, since neither cotton nor tobacco products could elude the Union blockade. In the same year, funds were needed to finance the Civil War, and tobacco products were among the commodities taxed (Jacobstein 1907). But tobacco production continued, perhaps because the price of tobacco increased as the fighting progressed (Robert 1967; Coulter 1926). Invading Union armies looted tobacco ware- houses and, during lulls in the fighting, traded their food and coffee for tobacco from the Confederate troops. Some Union soldiers looted a Durham ware- house owned by John Ruffin Green who, in 1858, had created a fine smoking and chewing tobacco known as Bull Durham. The soldiers tried the cured, granulated tobacco, and after the war, they purchased the tobacco and introduced it to others (Tilley 1948). Just as six- teenth-century sailors introduced tobacco to the rest of the world, the Union soldiers brought a demand back to the North for some of the sweeter, milder, southern tobaccos they had discovered. Within the tobacco industry, attention was fo- cused on the success of Bull Durham, which had transformed Durham from a small southern town to a thriving tobacco center. In 1875, not only was Bull Durham used for pipe smoking and chewing, but some smokers had started to roll cigarettes with it, thus taking business away from the small companies that manufactured pipe and loose chewing tobaccos. The success of Bull Durham also contributed to the growth of the North Carolina tobacco industry. In 1870, Virginia grew 15 times more tobacco than North Carolina, but 10 years later, Virginia produced five times less (Tilley 1948). The Manufacturing of Cigarettes Although demand for manufactured cigarettes had increased gradually from the 1850s to the 187Os, cigarettes were still an insignificant part of the tobacco industry. The Duke family were small tobacco farm- ers and dealers in the Durham area. The family's patriarch, Washington Duke, was a Confederate vet- eran who returned to a gutted farm after the Civil War. He found a small cache of Bright, which he sold under the name Pro Bono Publico. Duke and his sons planted Pro Bono Public0 and peddled their crop from town to town. The Dukes did a prosperous business, and in 1873 moved to Durham to be closer to the railroads that transported their product to market (Tilley 1948). By the end of the 187Os, growth in the Duke business had leveled off. James Duke traveled throughout the country selling Pro Bono Publico, but like all the other manufacturers, Duke found it diffi- cult to compete with Bull Durham (Robert 1967; Sobel 1978). In 1881, James, then the acknowledged head of the firm, started to manufacture cigarettes called Duke of Durham. Duke was successful from the start. A combina- tion of shrewd merchandising and aggressive price- cutting led to the increased popularity of Duke of Durham and other Duke brands. With the assistance of Edward Featherston Small, one of the first cigarette promoters, Duke merchandised his product effec- tively. At the time, manufacturers used cigarette cards to stiffen the soft packs; Duke cigarette cards were the most imaginative and sought after (Wagner 1971). Within a few years, cigarettes manufactured by Duke sold in many cities in the South and Midwest. In 1883, when the federal government reduced the tobacco tax from $1.75 to 50 cents per pound, most manufacturers passed part of the savings to customers through lower prices. Duke not only lowered his prices, he adver- tised his policy: "The Dukes are ambitious for a very large cigarette business, and to obtain such are dir,iliing their profits with the dealers and consumers" 28 Historicn[ Co7ztrxt (Tilley 1948, p. 557). Cigarettes manufactured by Duke sold for five cents for a package of 10. They were now the least expensive on the market, and sales in- creased dramatically (Wagner 1971). Even before Duke turned his attention to the manufacturing process, several inventors had been working to produce a cigarette-manufacturing ma- chine that would replace the workers who rolled cig- arettes by hand. But most manufacturers believed that the future of cigarettes was doubtful; they ques- tioned whether a machine capable of producing tens of thousands of cigarettes was truly needed. In 1881, James Bonsack, announced the inven- tion of his cigarette-making machine, which was re- jected by several firms. Duke, however, was interested and, with his engineer, helped Bonsack per- fect the machine. By 1884, the Bonsack model could produce more than 200 cigarettes per minuteA6.8 million cigarettes per year. Twenty of these machines could have satisfied the entire national demand for cigarettes for 1885. Bonsack signed a long-term contract with Duke, giving Duke rights to the machine. Although Bonsack was free to license his machine to others, his contract provided Duke with rebates, thus reducing Bonsack's net royalties. Later, Bonsack agreed that Duke's pay- ments would be at least 25 percent less than those paid by other firms (Sobel 1978). The Duke firm then had the lowest production costs in the tobacco industry, which gave it victory in price wars and a very high profit margin. Before the Bonsack machine was incor- porated into the process, most cigarettes sold for 10 cents for a pack of 10 cigarettes; after incorporation, for five cents. In 1880, Duke's total monthly payroll was $500; five years later, it was $15,000. From 1885 to 1886, production increased significantly-from 9 million to 30 million cigarettes. In August 1887, the Duke firm produced 60 million cigarettes (Tilley 1948). The firm realized high profits, which allowed Duke to acceler- ate his advertising and promotion campaigns. Most other tobacco manufacturers continued to believe that great profits were based in the production of smoking tobacco, chewing tobacco, and cigars. At the time, Duke gave no indication of entering those market areas. Duke was the only large firm in the tobacco industry that concentrated on manufacturing cigarettes (Sobell974). Duke believed that cigarettes would be most popular in urban areas. The firm relocated to New York where it soon became the largest cigarette manufacturer in the city. Allen & Ginter, located in Richmond, was the only serious competitor of Duke's in the late 1880s. Tobacco manufacturers competed fiercely for the purchase of tobacco, and dealer and smoker loyalty and price wars were frequent (Robert 1967). But cigarettes became increasingly popular, and consumer changeover was dramatic. In 1884, four cigars were sold for every cigarette. Three years later, the ratio was less than two to one-largely owing to the impact of the Bonsack machine. The Popularity of Cigarettes In 1890, Duke became The American Tobacco Company (ATC), the foremost tobacco manufacturer. Between 1895 and 1905, it was the second largest U.S. industrial firm in capitalization (behind U.S. Steel) and was more than three times the size of General Electric Company, Inc., the third largest enterprise (Nelson 1959). Expansion continued with the organization of American Snuff in 1900 (Sobell978). Reorganized as a holding company in 1901, ATC dominated the ciga- rette, snuff, smoking tobacco, and plug markets and soon purchased a controlling interest in United Cigar Stores. The firm did not enter into cigar production, primarily because cigars were rolled manually, which made competitive pricing difficult. However, cigars still accounted for 60 percent of the value of manufac- tured tobacco, and in order to enter this lucrative market, Duke established the American Cigar Com- pany in 1901 with an investment of $10 million. The firm controlled several significant factories, including Havana Tobacco, American Stogie, and Havana Com- mercial, but did not dominate the cigar industry. ATC had only a small market share of the cigar business (14 percent) but a large market share of cigarettes (86 percent), smoking tobacco (76 percent), and snuff (96 percent) (Lehman Brothers 1955). The dominance of ATC in cigarette production was significant because cigarettes were rapidly dominating the tobacco mar- ket (Jacobstein 1907). The cigarette's success can be measured by the excise taxes collected on tobacco varieties after the Civil War. In 1878, revenues from excise taxes on cigars and cheroots and on manufactured tobacco were considerably higher than those on cigarettes ($11.4 million, $25.3 million, and $300,000, respec- tively). When taxes were reduced by 50 percent in 1879, consumption of tobacco increased. Although taxes were reduced further in 1889, consumption did not increase enough to compensate for the lower tax rate. By 1890, tax revenues were $1.1 million for cigars and cheroots, $18.3 million for manufactured tobac- cos, and $1 .l million for cigarettes. When funds were needed for the Spanish-American War, taxes were temporarily increased (Arnold 1897; Jacobstein 1907). Hisfnricfl1 CCJllfYSf 29 U.S. g~~vcrnment rc\vnuc from tobacco sales from 1865 to IXYO is shown in Table 2. ln the 1880s and early 189Os, excise taxes on tobacco products accounted for approximately one- fourth of tota 1 federal government tax revenues, excIu- si\rc of tariffs. From 1863 to 1906, tobacco accounted for about 20 percent of government internal revenue (Jacobstein 1907), and an increasing proportion was derived from cigarette tax. An antismoking movement that had begun in the 1860s was revived 10 years later. The increased popularity of cigarettes may have been at least par- tially responsible for the effort, which concentrated on eliminating that particular form of tobacco use. Ad- vertisements of "cures" for smoking appeared in newspapers, and in 1880, the General Conference of the Methodist Episcopal Church resolved that its min- isters would abstain from tobacco (Robert 1967). In 1899, Lucy Page Gaston, who had been active in the Temperance Movement, established the Chi- cago Anti-Cigarette League and formed branches in other cities. The League and similar organizations opened clinics for curing smokers. Dr. D.H. Kress, the League's general secretary, patented a mouthwash containing a weak solution of silver nitrate, which he believed would cure all craving for cigarettes. Other remedies were developed, which were supposed to end the desire for all forms of tobacco (Sobell978). By the early twentieth century, several antismok- ing laws were enacted. New York State prohibited public smoking by persons less than 16 years of age. In 1897, under the Dingley Tariff, the federal government forbade the inclusion in tobacco packs of coupons, cards, and other inducements to smoking. The follow- ing year, the government doubled the cigarette tax (from 50 cents to one dollar per thousand). In 1901, Table 2. Tax revenue from tobacco sales, United States, 1865-1890 Percentage of Average rate of tax Year Total* government revenue+ per pound 1865 11.4 5.4 ,228 1870 31.4 16.9 .269 1875 37.3 33.8 .211 1880 38.9 31.2 .160 1885 26.4 23.5 .OBO 1890 34.0 23.8 .OBO Source: Arnold (1897). *In millions of dollars. `Although Arnold does not specify, the percentage appears to be of internal revenue, not total revenue. 30 Historical Context Table 3. Manufactured tobacco products,* United States, X470-1905 Year Pounds of manufactured tobacco and snuff 1870 102 1871 107 1872 112 1873 118 1874 124 1875 124 1876 124 1877 123 1878 125 1879 136 1880 146 1881 172 1882 159 1883 194 1884 172 1885 207 1886 210 1887 226 1888 209 1889 246 1890 253 1891 271 1892 274 1893 251 1894 269 1895 274 1896 261 1897 297 1898 275 1899 295 1900 301 1901 314 1902 348 1903 351 1904 354 1905 368 Number of cigars ~___- 1,183 1,353 1,578 1,755 1,835 1,828 1,776 1,816 1,923 2,217 2,510 2,806 3,118 3,232 3,373 3,294 3,462 3,662 3,668 3,787 4,229 4,422 4,675 4,341 4,164 4,099 4,048 4,136 4,459 4,910 5,566 6,139 6,232 6,806 6,640 6,748 Number of cigarettes 16 20 24 28 35 59 113 157 210 371 433 595 599 844 920 1,080 1,607 1,865 2,212 2,413 2,505 3,137 3,282 3,661 3,621 4,238 4,967 4,927 4,843 4,367 3,870 3,503 3,647 3,959 4,170 4,477 __________. Source: U.S. Department of Commerce (1975). *In millions. New Hampshire enacted the strictest legislation, mak- ing it illegal to manufacture, sell, or smoke cigarettes, and in 1907, Illinois passed similar legislation. By 1909, 11 states (Iowa, North Dakota, Tennessee, Ar- kansas, Indiana, Kansas, Minnesota, Nebraska, Okla- homa, South Dakota, and Wisconsin) had enacted laws prohibiting or limiting the use of cigarettes, and many cities had similar statutes (Wagner 1971). A survey of the period indicates that some form of anticigarette legislation had been passed in every state except Wyoming and Louisiana. In general, effort to control the use of cigarettes was stronger in the Mid- west than in the West and weakest in the East (Wagner 1971; Sobel 1978). Most of the state laws were re- scinded by the middle to late 1920s. ATC and several other tobacco companies re- sponded in the 14 states that banned cigarette smok- ing. One strategy was to sell "the makings" (i.e., smoking tobacco and cigarette paper) because ciga- rettes, not the materials themselves, were prohibited. In states where the sale of cigarettes was illegal but smoking was permitted, tobacco companies sug- gested that merchants provide free cigarettes and charge for matches. Cigarettes were also illegally transported to the states that banned cigarette sales (Sobel1978). It is difficult to assess whether antismoking ef- forts were effective. At the turn of the century, the price of plug tobacco declined drastically, and many cigarette smokers may have switched to plug. Con- versely, the economic boom that began in 1897 may have motivated former cigar smokers, who had con- verted to cigarettes during a previous economic downturn, to return to cigars. The net effect was that cigarette sales peaked in 1896 at 4,947 million units and then declined to 3,503 million in 1901 before again turning upward (Table 3). Although ATC was secure enough financially to survive the decline in cigarette consumption, most competitors were not, and many cigarette manufac- turers went out of business, further increasing Duke's market share. ATC accounted for slightly more than 80 percent of cigarette sales in 1894 and more than 90 percent in 1900 (Sobel 1978). Thus, the temporary decline in cigarette consumption served to narrow competition, a portend of further developments in the twentieth century. Urbanization in the second half of the nineteenth century contributed to the dominance of cigarettes in the tobacco market. The cigarette first gained popu- larity in cities, where the pace of life was faster than in small towns and rural areas. The desire for "a quick smoke" could be satisfied more easily with cigarettes than with cigars or pipes. Moreover, because ciga- rettes cost less than other tobacco products, smokers may have given little thought to lighting up a cigarette. Chewing tobacco, which posed few aesthetic prob- lems outdoors, caused concern in offices and factories. Informal social contact was more prevalent in cities than in rural areas. Offering someone a cigarette had a certain social cachet; it was an inexpensive way of socializing. Urban women were unlikely to smoke cigars, use snuff or pipes, or chew tobacco. But in the early twentieth century, educated women in the higher socioeconomic groups had already begun smoking cigarettes. The Emergence of the Tobacco Companies, 1900 to the Present Early Growth and Consolidation Once cigarette smoking became established as the chief form of tobacco ingestion in the United States, the history of tobacco was dominated by the growth of large transnational corporations (TNCs) in the United States and the United Kingdom. ATC was one of the earliest and largest TNC in the United States (Wilkins 1970). During the 188Os, in an attempt to expand demand for his products, Duke sent represen- tatives on world tours to procure business, and by the 189Os, almost one-third of U.S. cigarette output was exported to the Far East. ATC had almost complete control of U.S. cigarette exports (Tennant 19501, and when tariff barriers prevented exports, Duke established local manufacturing plants (as in Canada, Japan, Ger- many, and Australia) (U.S. Bureau of Corporations [USBOC] 1909). Britain's cigarette industry also ex- panded rapidly during this period, although growth was mainly confined to British colonial preserves and spheres of influence and was not as rapid as in the U.S. industry (Alford 1973; Corina 1975). By the mid- 189Os, agents for W.D. & H.O. Wills (by then the largest U.K. firm) and ATC were directly competing in India, Australia, Japan, and China (Alford 1973). By 1901, Duke had consolidated ATC's control over all segments of the U.S. tobacco industry (except cigars), and he decided to enter the U.K. market (USBOC 1909). His decision was influenced by the wave of antismoking hostility in the United States, which resulted in prohibitions in 14 states and a de- pression in sales between 1896 and 1906 (Tate 19891. In addition, some shift in market preference toward Turkish tobacco cigarettes led to new competition from small independents. To better compete with ATC, several English firms, under the leadership of Wills, merged into the Imperial Tobacco Company (ITC), and the two firms soon began to compete world- wide. ITC was about to enter the U.S. market when the two competitors came to terms (Corina 1975; Alford 1973). The 1903 Cartel The settlement created a classic cartel. Ogden's Imperial Tobacco Ltd., a small tobacco firm, was sold to ITC in exchange for 14 percent of its securities; ATC and ITC agreed not to encroach on each other's mar- kets; and a new London-based company, British- American Tobacco Company Ltd. (BAT), was orga- nized to control business outside the United Kingdom, the United States, Cuba, and Puerto Rico. Two-thirds of the initial E5.2 million capital was allocated to ATC and one-third to ITC in exchange for overseas opera- tions and export trade. Agreements were also made to ensure consultation and inhibit cheating (USBOC 1909; Alford 1973; Corina 1975). In 1903, BAT was a transnational corporation of impressive size, comparable to current TNCs in its number of overseas operations. By the end of World War I, it was the world's largest cigarette manufac- turer. Although some Chinese boycotted the firm's products, BAT's expansion was particularly extensive in China, BAT's largest market for many years (Cochran 1975; Wang 1960). BAT entered the U.S. market by acquiring a small Kentucky firm (Brown & Williamson Tobacco Corporation) in the late 1920s (Shepherd 1983). BAT also expanded rapidly in Latin America and in other markets outside the United States and the United Kingdom. The Antitrust Case of 1911 Meanwhile, the structure of the tobacco industry in the United States was undergoing profound change. The practices used by ATC in gaining and maintaining its market elicited opposition from to- bacco growers, leaf traders, small manufacturers, wholesalers, retailers, and organized labor (Tilley 1948; USBOC 1909,1911). These groups wanted better leaf prices for growers, more accessible market entry, increased price competition, and larger margins for retailers and jobbers (Tennant 1950; Cox 1933). The Supreme Court dissolved ATC in 1911 (U.S. 11. Amer- ican Tobacco Co. 221 U.S. 106 119111; Tennant 1950; Cox 1933; Corina 1975) and ordered that the conglomerate be split into several successor companies: Liggett & Myers Tobacco Company, Lorillard, a new ATC, and R.J. Reynolds Tobacco Company. Distribution of ATC stockholdings was required, and several permanent and temporary injunctions against recombination were issued. Although this action probably did not accomplish the desired results, the case did have long- term effects on the international tobacco industry and upset the structure of the domestic industry enough to stimulate nonprice domestic competition (Cox 1933). In 1913, R.J. Reynolds, which had not previously produced cigarettes, quickly launched a new type of cigarette, the American blend, with flavored Burley tobaccos. This cigarette, Camel, revolutionized the U.S. cigarette business and was quickly imitated by the new ATC's Lucky Strike and Liggett & Myers's Chesterfield. The advent of the American blend stim- ulated cigarette consumption and set off a long period (1913 to 1950) of extremely rapid, domestic growth known as the standard brand era (Sobel 1978). From 1911 to 1949, annual total U.S. cigarette output in- creased significantly (from 10 billion to 393 billion), while per capita consumption increased nearly twen- tyfold (Tennant 1950; Nicholls 1951). Sands (1961) concluded that the cigarette industry had the highest growth rate in physical output of all U.S. manufactur- ing industries for 1904 to 1947 and was second only to motor vehicles for 1904 to 1937. The average quin- quennial growth rate for output was 88 percent for cigarettes versus only 15 percent for all U.S. manufac- turing from 1904 to 1947 (Sands 1961). Growth in domestic consumption and output was so spectacular throughout that period that none of the firms showed any interest in developing foreign operations or ex- ports (Shepherd 1983). During this same period, the dilution of ATC's two-thirds holding in BAT meant that the concen- trated one-third shareholding of ITC was eventually controlled by BAT. Thus, in the early 192Os, BAT became a British-controlled corporation. Because U.S. antitrust law had no jurisdiction over either BAT or ITC, except in their U.S. leaf-buying operations, the BAT/ITC market allocation agreements of 1903 were continued in Britain until the early 1970s. In the ab- sence of British antitrust action, ITC continued to dom- inate the U.K. domestic market, while BAT controlled markets outside the United States. Even after the Eu- ropean Economic Community regulations forced the formal repudiation of the BAT/ITC market division in Europe in the 197Os, BAT/ITC relations remained close because the British Monopolies Commission did not take remedial action (Corina 1975). As a result, brands developed by ATC became the property of BAT outside the United States and for export from the United States (Cox 1933). This severely 32 Historical Context limited the new ATC from expanding overseas be- cause many of its top-selling domestic brands (e.g., Pall Mall and Lucky Strike) had been ATC brands before the agreement. As the new ATC came to be one of the major U.S. firms, this constraint powerfully reinforced the domestic orientation of the industry. Finally, although the ruling declared the formal cartel illegal, the arrangements persisted exactly as before: U.S. firms marketed domestically; ITC dominated the British domestic market; and BAT remained the pre- dominant international force outside theunited States and United Kingdom well into the 1960s. Thus, U.S. cigarette firms enjoyed relative protection in expand- ing sales in the large, rapidly growing U.S. market. World War II provided the opportunity for sig- nificantly increased exports for U.S. firms. European production facilities had been destroyed, and Ameri- can cigarettes became a coveted commodity due to the popularization of everything American. However, U.S. manufacturers did little to take advantage of this situation (Shepherd 1983). International markets were viewed as unstable and unlikely to provide fu- ture growth. The long period of expansive domestic growth made overseas markets pale in comparison. A near doubling of sales during the war and the reemer- gence of the overwhelming dominance of R.J. Reynolds, Liggett & Myers, and ATC made the struggle for do- mestic market shares more important than ever. Stagnation Domestically and Growth Abroad But changes in cigarette consumption had begun in the United States by the late 1940s (Kellner 1973). The growth rate of the domestic market began to shrink as it became saturated at a high level of con- sumption (see Figure 1 j. The market further declined when the health effects of smoking first surfaced as a major public concern in the early 1950s. In association with media publicity about the relationship between cigarette smoking and incidence of lung cancer, sales decreased 5 percent in 1954 (Kellner 1973). The small firms were most affected by the de- cline in sales. The two smallest, Philip Morris Compa- nies Inc. and Lorillard, began to explore the possibility of expansion into international markets and of in- creased exportation (Shepherd 1983). These firms were particularly concerned that domestic sales might fall below the minimum level required to finance the development and promotion of the new filtered ciga- rette. The first ventures abroad, including those in Latin America (Shepherd 1983), in the 1950s were tentative and coincided with increased tariffs in sev- eral small, though attractive, export markets, such as Australia, Panama, the Philippines, and Venezuela. Figure 1. Per capita cigarette consumption, United States, WOO-199l* Source: U.S. Department of Agriculture (unpublished historical data, 1%5,1991); Grise and Griffin (1988). *1991, provisional data. Historical Cmtrxt 33 Philip Morris did establish a partly owned subsidiary in Australia, but most of the U.S. ventures consisted of licensing agreements with local firms. In general, domestic orientation remained strong, and U.S. pro- ducers did not take advantage of the potential inter- national popularity of American blend cigarettes. The reluctance, particularly among the large companies, to pursue international markets may have been related to the success of filtered cigarettes, which revived high domestic growth rates in the late 1950s. Nonetheless, the smaller firms continued to acquire interests in foreign operations and were quite successful on a limited scale. In this way, Philip Morris positioned itself for a substantial advantage over the rest of the U.S. cigarette industry. The business impact of filtered cigarettes was temporary (Kellner 1973). In 1962, the U.S. govern- ment initiated an inquiry into the health hazards of smoking (Eritschler 1975). In the resulting report of the Surgeon General, which received considerable at- tention, smoking was linked to several serious dis- eases (Public Health Service 1964). The publication of the report had immediate impact on U.S. cigarette sales (USDHHS 1989). The expression of public con- cern in the early 195Os, followed 10 years later by this formal statement of adverse health consequences, made it apparent that the health issue would probably continue to affect sales adversely in the future. During 1900 to 1950, U.S. aggregate cigarette sales failed to exceed those of the previous year only four times, but from 1950 to 1977, sales decreased seven times (Shepherd 1983). After 1964, every U.S. cigarette firm sought to acquire both foreign cigarette manufacturing opera- tions and domestic nontobacco businesses (Taylor 1984). As sales continued to stagnate, pressure grew to diversify out of the U.S. cigarette market (Miles and Cameron 1982; Shepherd 1983,1985). Thus, the upsurge in direct foreign investment and licensing abroad by U.S. cigarette firms was prob- ably attributable to the stagnation of the U.S. market that resulted from the smoking and health issue (Warner 1977). Health concerns provided the decisive push in the search for alternative markets for the smallest firms in the 195Os, and after 1964, for the larger firms as well. Some traditional economic moti- vations-such as defensive investment, maintenance of export markets, and protection of a technologically based oligopoly-probably played a less important role (Shepherd 1983). Few patterns were discernible in the flow of investment and licensing abroad, and firms did not necessarily explore markets with high growth rates. Much activity targeted Europe, for example, where per capita consumption was already fairly high. Likewise, cigarette companies did not necessarily seek large markets nor penetrate high-income markets and then low-income markets; firms entered both markets simultaneously. Rates of growth, market size, levels of cigarette consumption, income, and other market characteristics appeared less important than the im- mediate concern of stagnation in the United States (Shepherd 1983). Given the pressure to diversify quickly, most of the overseas subsidiaries established by U.S. firms were acquired rather than newly established. Of the traceable foreign subsidiary operations established during 1950 to 1976, 76 percent were acquisitions of foreign manufacturing firms by U.S. companies (Shepherd 1985). Thus, U.S. firms began foreign oper- ations by using established national brands and work- ing through existing distribution networks. Completely new subsidiaries emerged only where the local tobacco industry was so underdeveloped that no local firms were available for acquisition or where TNC competitors already owned the entire industry. As an illustration, 77 percent of the 22 subsidiaries established in Latin America were acquired rather than newly founded (Shepherd 1985). Diversification In their post-1964 efforts to diversify holdings, cigarette firms used the same strategy of acquiring existing companies that they had used earlier. In the first of three stages of diversification, cigarette firms focused on acquiring nontobacco businesses. By the late 197Os, TNCs derived a significant and growing share of their sales and income from nontobacco pur- suits (35 to 50 percent of sales and 10 to 30 percent of earnings were the norm for the larger firms)(Miles and Cameron 1982). The proportions were somewhat higher for the smaller enterprises (Shepherd 1983). For a time, diversification seemed successful, and it appeared that some firms might become prototypes of a new form of conglomerate TNC. For example, dur- ing the 198Os, BAT spent US$7 billion on nontobacco acquisitions, the same amount as the company's mar- ket capitalization at the end of 1988 (Euromonitor Consultancy, Volume I, 1989). However, the premise upon which this early diversification was based proved false. The continuing association of cigarette smoking with certain chronic diseases and the resulting decline in consumption could not be easily countered with nontobacco acquisi- tions. Diversification was not well received by inves- tors-the newly acquired nontobacco companies earned less than the cigarette companies did (White 1988). Thus, mergers with nontobacco firms lowered 34 Historical Cmt~xf financial results dramatically. Furthermore, investors tended to judge stocks on the basis of future prospects rather than current earnings, and tobacco activity was deemed risky. Nontobacco acquisitions did not raise the market price of cigarette stocks; instead, the value of stocks in nontobacco firms were reduced when these firms were acquired by cigarette companies (Burrough and Helyar 1990; Euromonitor Consul- tancy, Volume I, 1989). A second phase of takeovers began in the 1980s. Cigarette firms began to vary their diversification; some companies continued with new acquisitions, while others sold their nontobacco holdings (Anony- mous 1983; Blum and Wroblewski 19851. However, all firms suffered from low price-earnings ratios, and their stocks were worth far less than their assets or real current earnings potential. Nearly all of these firms were viewed as takeover targets (Nordby 1989) be- cause of the high cash flow from their core cigarette business. ITC was taken over by Hanson Trust Ltd. in 1986 (Euromonitor Consultancy, Volume I, 19891, Nabisco Inc. by R.J. Reynolds in 1988, and the two latter companies by Kohlberg Kravis Roberts & Com- pany in 1989 (Burrough and Helyar 1990). BAT nar- rowly escaped a takeover of this sort in 1989 (Euromonitor Consultancy, Volume I, 1989; Tobacco Reporter 1989b). By the late 198Os, diversification was entering its third stage, in which company strategies diverged markedly. Some firms, such as R.J. Reynolds, BAT, and Hanson Trust, focused more on cigarettes, while others, such as Philip Morris, ATC, and Loews Corpo- ration (its tobacco holding is Lorillard), continued to grow through nontobacco acquisitions (Sherman 1989; Winters et al. 1988; Matlick 1990a,b). For all of these firms, however, diversification provided greater power and leverage to protect the cigarette business from further erosion (White 1988). Diversification aided in opposing smoking restrictions, product liabil- ity suits, and advertising and press coverage of health hazards (McGill 1988), and it broadened political co- alitions against anticigarette legislation (White 1988). International Competition Entry of U.S. cigarette firms abroad after 1964 generated new competition within the industry, especially with BAT. Philip Morris and, to a much lesser extent, R.J. Reynolds were BAT's primary com- petitors. Liggett & Myers was almost wholly unsuc- cessful abroad, and Lorillard, which pursued a strategy of overseas licensing, eventually sold the rights to its brands abroad to BAT in 1978. ATC's brands in overseas markets were already largely owned by BAT. ATC concentrated almost all of its overseas manufacturing in the U.K. domestic market after ac- quiring Gallaher Tobacco Ltd. in the late 1960s (Corina 1975). Nevertheless, as U.S. firms continued to ex- pand in the 1960s and 197Os, it became apparent that the Anglo-American understanding on separate develop- ment was over. ATC, through Gallaher, competed withITCin theUnitedKingdom,whilePhilipMorrisand R.J. Reynolds competed with BAT almost everywhere. In the early 197Os, Philip Morris became the world's second-largest tobacco company, and Marlboro be- came the world's largest-selling brand. Although it lagged slightly behind BAT in world cigarette volume in the 198Os, Philip Morris's sales value and growth were much higher, and it became the world's largest cigarette firm (Euromonitor Consultancy, Volume I, 1989). Despite these developments, some de facto spheres of influence have remained. In all but the largest national markets, only a few TNCs are usually present. These historical spheres of influence and pat- terns of mutual forbearance are most obvious in Asia and Africa where European firms have dominated, except for U.S. licensing in the Philippines. Until the 198Os, U.S. firms tended to restrict their operations to more familiar terrain in Latin America and Western Europe. The larger markets of Western Europe, Can- ada, and Latin America have been areas of fairly com- petitive activity (Shepherd 1985). But on the whole, oligopolistic competition, market allocation, and re- straint have characterized TNC operations. In general, the normal pattern has not been ag- gressive, although several markets have been con- tested. For example, in Brazil and Argentina, after several years of advertising and new brand launchings, the parties tended to come to terms, expenses for demand creation were reduced, and new market shares and a more settled equilibrium evolved (Shepherd 1985). The Current Structure of the Industry By the late 198Os, a new transnational equilib- rium appeared to have been established. The industry regrouped along a three-tiered stratification of firms. The first tier included four truly transnational firms: BAT, Philip Morris, R.J. Reynolds, and Rothmans International Tobacco Ltd. Second-tier firms, like American Brands, Inc., and Reemtsma GmbH & Com- pany, were still international but not global in scope. These firms continued to retain important foreign markets but were largely confined to a specific region, such as Europe. Finally, smaller cigarette firms like Loews, ITC, and Liggett & Myers retired to their Historical Context 35 respective national markets and became increasingly marginalized. After the late 197Os, the creation of new subsidiaries and licensing agreements slowed, a de- velopment which contributed to the period of consol- idation in the 1980s and the subsequent equilibrium (Shepherd 1985). Six of the dominant firms-BAT, Philip Morris, R.J. Reynolds, American Brands, ITC, and Rothmans International-recorded total sales in U.S. dollars, in- cluding taxes and nontobacco merchandise, of 97 billion in 1989 (Table 4). These TNCs are among the largest U.S. manufacturing firms and among the largest firms in the world; they exert considerable economic influence worldwide. The nontobacco op- erations of these firms are included in Table 4; how- ever, the cigarette industry forms the basis of the economic activity of these TNCs (Miles and Cameron 1982; White 1988). Complex equity and licensing patterns link the major firms in the transnational cigarette industry, and Anglo-American companies dominate the indus- try (Table 5). Of the seven major firms with extensive international operations, such as direct investments, licensing arrangements, and large-scale exports, only Reemtsma has neither U.S. nor British ownership. Rothmans International is a unique combination of South African, British, and Western European tobacco interests. For the past 20 years, Rothmans Interna- tional has acquired economically troubled national tobacco firm-mostly in Western Europe. The latest Rothmans International acquisition is The Carroll To- bacco Company Ltd., an Irish cigarette manufacturer (Harman 1990). In 1981, Philip Morris acquired 29 percent of Rothmans International stock but recently sold it (Nordby 1990). R.J. Reynolds recently sold its Brazilian operations to Philip Morris (Tobacco Interna- tional 19901, and Philip Morris merged its Canadian and U.K. businesses with Rothmans International (Harman 1988). Four major TNCs (BAT, Philip Morris, R. J. Reyn- olds, and Rothmans International) account for 31 per- cent of total world production of cigarettes (5,245 billion in 1988) (Table 6). If socialist-planned econo- mies of 1988 are excluded, these four firms account for 57 percent of manufactured cigarettes. If countries with socialist-planned economies or state monopolies in 1988 are excluded, these four companies account for almost 75 percent of cigarette sales in private enter- prise markets worldwide. This percentage may actu- ally be greater because, due to licensing, brand concentration of TNCs would be higher. In fact, each estimate may be subject to a substantial margin of error because of difficulty sorting out relationships among participants. Since the several socialist-planned economies and state monopolies of 1988 account for approxi- mately 60 percent of world cigarette sales (Table 6), the primary avenues of expansion for the major TNCs are now through entry into state monopolies, socialist- planned economies, the former Soviet Union, and Table 4. Economic activity" and rankings of maior transnational cigarette producers, 1989 Company Sales5 Philip Morris 39,069 British American Tobacco 23,529 R.J. Reynolds/Nabisco 15,224 Imperial Tobacco/Hanson Trust 9,900 American Brands 7,265 Rothmans International 2,210 Total 97,197 - Source: Forfllne (1989,1990a,b). *Includes tobacco and nontobacco activities. `In U.S. dollars (millions). TBased on 1988 sales data. , Activity+ Profits 2,946 2,123 (1,149)" 1,987 631 228 7,915" Assets 38,528 18,656 36,419 13,210 11,394 3,182 121,389 Fortune 500 ranking$ U.S. Global International 7 14 - - 36 42 24 66 - - 62 64 178 - 352 %ncludes excise taxes on tobacco and nontobacco products. "Loss due to restructuring of operations following 1989 takeover by Kohlberg Kravis Roberts. Losses are not included in total. 36 Historical Context Table 5. Transnational cigarette industry: subsidiaries and affiliates (financial interest) or licensing agreements* -___--~ Subsidiaries and affiliates Argentina B.A.T. Industries (Nobleza-Piccardo S.A.I.C.yF.1 Philip Morris (Massalin Particulares S.A.) Reemtsma GmbH (Massalin Particulares S.A.) Barbados B.A.T. Industries (B.A.T. Co. [Barbados] Ltd.) Brazil B.A.T. Industries (Cia. Souza Cruz Industria e Commercio) Philip Morris (Philip Morris Marketing, S.A.) R.J. Reynolds (R.J. Reynolds Tabacos do Bras& Ltd.) Canada B.A.T. Industries (Imperial Tobacco Ltd.) Philip Morris (Rothmans, Benson & Hedges Inc.) R.J. Reynolds (RJR-Macdonald Inc.) Rothmans International (Rothmans, Benson & Hedges, Inc.) U.S. Tobacco (National Tobacco Company) Chile B.A.T. Industries (Chiletabacos SA) Costa Rica B.A.T. Industries (Republic Tobacco Company) Philip Morris (Tabacalera Costarricense, S.A.) Dominican Republic Philip Morris (E. Leon Jimenes, C. por A.) Ecuador Philip Morris (Tabacalera Andina S.A.) R.J. Reynolds (Fabrica de Cigarillos El Progreso S.A.) El Salvador B.A.T. Industries (Cigarreria Morazan S.A. de CV) Philip Morris (Tabacalera de El Salvador, S.A. de C.V.) Guatemala B.A.T. Industries (Tabacalera National S.A.) Philip Morris (TabacaIera Centroamericana S.A.) Guyana B.A.T. Industries (Demerara Tobacco Co. Ltd.) Honduras B.A.T. Industries (Tabacalera Hondurena S.A.) U.S. Tobacco (Centro Americana Cigar, S.A.) Jamaica Rothmans International (Carreras Group Ltd.) Mexico Philip Morris (Cigarros La Tabacalera Mexicana, S.A. de C.V.) Nicaragua B.A.T. Industries (Tabacalera Nicaraguense S.A.) Panama B.A.T. Industries (Tabacalera Istmena S.A.) Philip Morris (Tabacalera National S.A.) Puerto Rico R.J. Reynolds (R.J. Reynolds Tobacco Company) Suriname B.A.T. Industries (B.A.T. Co. Ltd. Suriname) Trinidad B.A.T. Industries (The West Indian Tobacco Company Ltd.) United States American Brands (The American Tobacco Company) B.A.T. Industries (Brown and Williamson Tobacco Corp.) Imperial Tobacco (Imperial Tobacco Leaf Services Inc.) Philip Morris (Philip Morris U.S.A.) Reemtsma GmbH (West Park Tobacco Inc.) R.J. Reynolds (R.J. Reynolds Tobacco Co.) Svenska Tobaks (The Pinkerton Tobacco Company) U.S. Tobacco (United States Tobacco Company; United Scandia International) Uruguay Philip Morris (Abal Hermanos, S.A.) Venezuela B.A.T. Industries (C.A. Cigarrera Bigott SUCS) Philip Morris (C.A. Tabacalera National, S.A.) Licensing agreements Argentina Reemtsma GmbH (Massalin Particulares S.A.) R. J. Reynolds (Nobleza-Piccardo S.A.I.C.yF.1 Bolivia B.A.T. Industries (Tabacalera SRL) Philip Morris (Cia. Industrial de Tabacos S.A.) Brazil Reemtsma GmbH (Philip Morris) Chile Philip Morris (Fabrica de Cigarillos LTDA) Costa Rica Reemtsma GmbH (Tabacalera Costarricense S.A.) Curaqao Philip Morris (Superior Tobacco Co. of Curaqao N.V.) Historical Context 37 Table 5. Continued Ecuador B.A.T. Industries (Tabacalera Ecuatoraria) Haiti B.A.T. Industries (Luckett Tobaccos) Mexico R.J. Reynolds (Cigarrera La Moderna S.A. de C.V.) U.S. Tobacco (Philip Morris) Netherlands Antilles Philip Morris (Superior Tobacco Co. N.V.) Panama Reemtsma GmbH (Tabacalera National S.A.) Paraguay B.A.T. Industries (La Vencedora S.A.) Peru Philip Morris (Tabacalera National S.A.) R.J. Reynolds (Tabacalera National S.A.) Suriname B.A.T. Industries (Tobacco Company of Suriname N.V.) Source: Tobucco~~~orfer(1990). "Name of transnational corporation given first, followed by name of local company in parentheses. Eastern European countries. During the 198Os, the major TNCs focused on gaining access to the expand- ing markets of Japan, South Korea, Taiwan, and Thai- land, where state monopolies had long prevailed (Zimmerman 1990; Chadha 1989; Heise 1988; Con- nolly 1989; Wallace 1989; Doolittle 1990b; Mackay 1989; Chen and Winder 1990). The major TNCs are also opening the Western European monopolies with large-scale exporting (Stefani 1990a; Shelton 1988; To- bacco Reporter 1989a). During the 198Os, France lost nearly 50 percent of its market to cigarettes imported by TNCs (Manus 1988; Stefani 1990b). Despite consid- erable difficulty, U.S. and European TNCs are at- tempting to open the formerly closed markets of Eastern Europe, the former Soviet Union, and China (Zimmel 1990; Doolittle 1990a,b; Chadha and Sokohl 1990; American Cancer Society 1991). Transnational cigarette companies dominate the markets in specific countries (Table 7). Non- transnational firms hold small market shares in most countries; in only a few countries do nationally owned, private cigarette firms account for more than 30 percent of the national market. In some countries, market concentration continues the trend toward in- creased TNC market control. TNCs do not compete against each other in the world commodity market, except through exporta- tion; only 10 percent of the total world cigarette pro- duction is traded internationally (USDA 1990d,e). Rather, TNCs compete in national markets in which the level of concentration of firms is much higher than in the world market. Direct competition is limited because in only a few of the largest markets do more than two or three TNCs compete (Shepherd 1985). Table 6. Estimated cigarette output, by producing group, 1988 29.5 7.2 6.9 0.6 0.5 0.3 45.0 Group Number* Percent Socialist-planned economies China 1,545 USSR 378 Eastern Europe 360 Cuba 30 Vietnam 25 North Korea 15 Subtotal 2,353 State mor.opolies &%% Korea 268 86 Spain 78 Italy 67 Turkey 60 France 53 Egypt 43 Maghreb countries 35 Thailand 35 Iran 15 Austria 14 Subtotal 754 Major transnational corporations British American Tobacco 575 Philip Morris 555 R.J. Reynolds 285 Rothmans International 220 Subtotal 1,635 Others producers+ American Brands 90 Reemtsma 48 Loews (Lorillard) 46 Imperial Tobacco 43 Subtotal 503 5.1 1.6 1.5 1.3 1.1 1.0 0.8 0.7 0.7 0.3 0.3 14.4 11.0 10.6 5.4 4.2 31.2 1.7 0.9 0.9 0.8 9.6 Source: US. Department of Agriculture (1990d) *In billions. `Includes independent domestic cigarette firms and small state monopolies. 38 Historical Context Table 7. Cigarette market share of major transnational firms and affiliates,* selected countries, 1988 Americas Argentina British American Tobacco (Nobleza Piccardo, 57.21 Philip Morris (Massalin Particulares, 42.8) Brazil British American Tobacco (Souza Cruz, 79.6) Philip Morris (Santa Cruz, 8.0) R.J. Reynolds (R.J. Reynolds Tobacos de Brasil, 9.5) Other (2.9) Canada British American Tobacco (Imperial, 54.3) Rothmans (Rothmans, 30.81 R.J. Reynolds (Macdonald, 14.7) Other (0.2) El Salvador British American Tobacco (Cigarreria Morazan, 78.4) Philip Morris (Tocasa/Tasasa, 21.6) Guatemala British American Tobacco (Tabacalera National, 48.9) Philip Morris (Tabacalera Centro-Americana, 51 .l) Jamaica Rothmans (Cigarette Company of Jamaica Ltd., 100.0) Mexico British American Tobacco (La Moderna, 58.8) Philip Morris (Tabacalera Mexicana, 39.8) Other (1.4) Nicaragua British American Tobacco (British American Tobacco, 99.9) Other (0.1) Panama British American Tobacco (Tabacalera Istmena, S.A., 60.4) Philip Morris (Tabacalera National, S.A., 39.6) United States British American Tobacco (Brown & Williamson, 10.9) Philip Morris (Philip Morris, 39.31 R.J. Reynolds (R.J. Reynolds, 31.8) American Brands (American Brands, 7.0) Other+ (11 .O) Venezuela British American Tobacco (Bigott Sues, 79.6) Philip Morris (Tabacalera National, 20.3) Other countries Australia British American Tobacco (Wills, 30.9) Philip Morris (Philip Morris, 33.2) Rothmans (Rothmans, 35.1) Other (0.8) Belgium British American Tobacco (British American Tobacco, 12.1) Philip Morris (Weltab, 18.1) Rothmans (Tabacofina, 39.1) R.J. Reynolds (R.J. Reynolds, 7.3) Reemtsma (Cinta, 16.7) Other (6.7) Denmark British American Tobacco (Skandinavisk Tobakskompagni, 98.2) Other (1.81 Finland British American Tobacco (Suomen Tupakka, 19.8) R.J. Reynolds (Rettig, 15.4) Othert (64.8) West Germany British American Tobacco (British American Tobacco, 22.3) Philip Morris (Philip Morris, 27.61 Rothmans (Brinkman, 10.7) R.J. Reynolds (H. Neuerbur, 9.2) Reemtsma (Reemtsma, 25.0) Other (5.2) Ghana British American Tobacco (British American Tobacco, 89.01 Rothmans (Rothmans, 6.0) Other (5.0) India British American Tobacco (India Tobacco Company/Vizar Sultan Tobacco Company, 68.0) Philip Morris (Godfrey Philips [India] Ltd., 15.0) Other (17.0) Kenya British American Tobacco (British American Tobacco, 99.8) Other (0.2) Malaysia Philip Morris (Philip Morris, 3.3) Rothmans (Rothmans, 46.3) R.J. Reynolds (R.J. Reynolds, 16.31 Other (34.1) Historical Context 39 Table 7. Continued Netherlands British American Tobacco (British American Tobacco, 23.0) Philip Morris (Philip Morris, 18.0) Rothmans (Rothmans, 40.0) Other (19.0) Pakistan British American Tobacco (Pakistan Tobacco Company Ltd., 53.0) Other (47.0) Sri Lanka British American Tobacco (British American Tobacco, 99.9) Other (0.1) United Kingdom Philip Morris (Philip Morris, 5.1) Rothmans (Carreras Rothmans, 9.2) R.J. Reynolds (R.J. Reynolds, 3.4) American Brands (Gallaher, 39.4) Others (42.9) Zaire British American Tobacco (British American Tobacco, 42.0) Rothmans (Rothmans, 58.0) Source: Maxwell (1989a,b, 1990a,b,c,d). `Name of transnational corporation given first, followed by name of local company and market share (percentage) in parentheses. +Lorillard/Loews, 8.2 percent; Liggett & Myers, 2.8 percent. SExtensive licensing of locally owned tobacco companies by transnational firms. ' %cludes Imperial Tobacco/Hanson Trust, 34.6 percent. The cigarette industry is also dominated by only a few top-selling brands (Table 8). The top two brands account for large shares of most of the world's large cigarette markets outside of countries with socialist- planned economies (in 1988 and 1989). The top 10 brands comprise most sales in these markets (from a low of 71 percent in Italy to 100 percent in Brazil and France). In 1987, the top 25 brands accounted for 25.5 percent of world sales by volume, or 46 percent of sales in countries that did not have socialist-planned econ- omies at the time. Philip Morris's Marlboro was the best-selling brand (293 billion cigarettes). This vol- ume was approximately equal to total cigarette sales in Japan, or the equivalent of total combined sales for the United Kingdom, Italy, and France. Outside of countries with socialist-planned economies (includes the former Soviet Union), more than one cigarette in 10 sold is a Marlboro (Euromonitor Consultancy, Vol- ume II, 1989). Barriers to Entry Barriers to market entry affect the current structure of the international cigarette industry. Three major barriers are commonly cited (Bain 1956): (1) absolute cost advantages for existing firms, (2) economy of scale (or other advantages of large- scale production), and (3) consumer preference for the products of existing firms. The last fact& is probably the most important. Several factors ensure sustained consumer pref- erence for the existing products: the location of plants or sales outlets, the provision of exceptionally good service by the firms, the technology to produce phys- ical differences in the product, and the creation of a favorable image of the product (Scherer 1980). All four factors contribute to the creation of demand by the cigarette industry. The first two factors result from the manufacturer's investment in distribution net- works, sales forces, and market research, but they are unlikely to be as decisive in most markets as are the second two factors. The third factor, technology for producing dif- ferences in products or packaging, has permitted TNCs to gain a foothold in the foreign market. How- ever, the advantages gained by firms on the frontier of product technology are usually short-term, mainly because the differences are easy to copy. Examples in which a competitor has copied a new product form Table 8. Percentage of sales by top cigarette brands in selected countries, 1988-1989 Country Top two Top five Top ten Australia 41.3 63.3 77.6 Brazil 66.3 94.2 100.0 Canada 41.1 67.3 81.2 France 67.7 85.6 100.0 Italy 48.8 62.2 71.4 Mexico 42.1 71.7 87.7 United Kingdom 31.5 57.0 74.0 United States 35.6 53.3 71.8 West Germany 40.3 58.7 73.2 Source: Maxwell (1989a,b, 1990b,d). 40 Historical Context and eventually became the market leader for that type of cigarette are common in the history of the cigarette industry (Kellner 1973). Consequently, although these innovations are a barrier to entry for potential competitors, they do not usually ensure the major TNCs a durable monopoly. The fourth factor, the creation of favorable brand images through mass advertising and other types of promotion, reinforce differences in product form and packaging. Most industry analysts agree that estab- lished consumer preferences for existing products constitute the major obstacle to new entrants and that demand creation (i.e., marketing) has been the most important source of the high degree of concentration in the industry (Tennant 1950; Nicholls 1951; Kellner 1973; Cox 1933; United Nations Conference on Trade and Development [UNCTADI 1978). The term marketing, however, is a misnomer; it implies some process of adaptation to a given, autonomous market when, in fact, the activities described above often con- trol and change or, in effect, transcend the market. The consumer loyalty that existing brands have gained from previous and current promotional activ- ities is a powerful barrier. According to fragmentary market research from the 197Os, approximately 50 percent of U.S. cigarette smokers have never changed brands, and an additional 25 to 30 percent have smoked the same brand for three or more years (Key 1976). Profound product-form modifications, such as the introduction of filters in the 1950s or the change to low-tar brands in the 1970s and 198Os, tend to alter brand loyalties, but these modifications are infrequent (USDHHS 1989). Furthermore, since a new brand has to overcome not only current advertising of existing brands but also the effect of previous advertising, a high level of expenditure is required to introduce a new brand, even by existing firms. A potential com- petitor must spend more than the established firms do on advertising. Thus, cigarette advertising is an in- vestment (although it is not treated as such by account- ing conventions or tax laws) (Comanor and Wilson 19751, and the return on investment may continue for many years (Weiss 1969). Profitability The high barriers to entry and high levels of concentration in the industry have led to oligopolistic price-setting, a development which implies profits in excess of a competitive profit-rate equilibrium. Before cigarettes were proven to be harmful, this characteristic was the main complaint about the industry in the United States (Tennant 1950) and the main concern of the literature on the cigarette industry. Two major U.S. antitrust cases against the industry ensued in 1911 and 1946 (Tennant 1950; Nicholls 1951; Cox 1933; USBOC 1909,1915; Kellner 1973). These same consid- erations led to an inquiry into concentration, pricing, and excess profit in Britain (U.K. Monopolies Commis- sion 1961). Despite official concern, and even after cigarette smoking was linked to certain chronic diseases in the post-World War II period, the industry's high levels of profitability continued. The U.S. tobacco industry led all U.S. industries in profitability, return to investors, and minimization of import penetration (Miles and Cameron 1982). Throughout the 1960s and 197Os, profitability of the post-World War11 TNCs continued to be well above the average for all manufacturing firms (Kellner 1973; Shepherd 1983,1985). Available measures of profitability for the U.S. tobacco industry are conservative because they in- clude the small tobacco firms that do not make ciga- rettes, for which profitability is presumed to be lower, as well as the nontobacco operations of tobacco firms (Table 9). Nonetheless, the more profitable firms have done very well. Philip Morris averaged a 33 percent return on domestic sales in 1984 through 1988 and 9.5 percent internationally, for a weighted average of 16 percent (Euromonitor Consultancy, Volume 1, 1989). Despite its recognition as a cigarette company, Philip Morris was a popular stock in the 1980s because of its performance (Sherman 1989). To the extent that the figures can be compared, profitability in the 1980s appears similar to that enjoyed by U.S. firms during the height of the American cigarette industry-from 1911 to 1950. This level of profitability has been char- acterized as "far above competitive levels and [it] be- speaks a high degree of market control vigorously exercised" (Tennant 1950, p. 342). In the United States, increased profitability in the 1980s has been related to both decreased overall sales and a diminished regulatory environment for busi- ness. Because of the long history of antitrust concerns, tobacco companies avoided for decades any obvious price-setting patterns, even as they continued to regu- larly raise prices. In the deregulated business climate of the 1980s (Burrough and Helyar 19901, however, the cigarette firms started raising prices regularly, begin- ning with four increases in 1982 and continuing to the present with semiannual (June and December) increases (USDA 1987, 1990a). The price of tobacco products has outpaced the consumer price index since 1983 by an ever wider margin (USDA 1990a,c), although some of this increase is attributable to taxation. This pattern has resulted because, in an unregulated oligopoly, dwindling sales are balanced by higher prices and thus higher profit margins from sales to the remaining, presumably less price-elastic, "hard-core" smokers. Historical Context 41 The distribution of returns from cigarette sales highlights the increased profitability of the industry in the 1980s (Table 10). By 1985, the federal excise tax and leaf growers' shares had declined substantially. Total excise taxes decreased from almost 50 percent of the consumer dollar spent on cigarettes to less than a third, and the U.S. farm value fell to only 5 percent. Although cigarette producers' 22 percent share in 1980 was not significantly different from their 21 percent share in 1950, it increased to 34 percent in 1985 (Table 10). More efficient manufacturing (better equipment and increased use of tobacco stems and reconstituted tobacco sheets), greater use of cheaper imported to- bacco (about one-third of U.S. cigarettes in the mid- 198Os), and product form changes (filter tips and slim cigarettes) all contributed to the increase in profitability (USDA 1987,1990a,d), as did the decisive use of mar- ket power in the 1980s. The high and increasing profitability of the in- dustry in the United States is of concern because the richer the industry becomes, the more powerful it becomes and the more difficult it is to control (White 1988). The public health community faces the politi- cal, legislative, and economic strength of the tobacco industry, built up over time by the phenomenal cash flow and profitability of the cigarette business. The Current Status in Latin America and the Caribbean As described, a striking feature of the world cigarette industry in the last several decades has been the displacement in many countries of the nationally owned tobacco company by a TNC subsidiary. This phenomenon is perhaps most evident in Latin Amer- ica and the Caribbean, where it has major implications for the future social and health-related outcomes of smoking (Connolly 1989). An overview of the history and current aspects of the cigarette industry in the region follows. Tobacco often figured in the economic and polit- ical struggles of the colonial era in Latin America and the Caribbean. The Comunero Rebellion in Socorro, Table 9. Income and profitability of tobacco manufacturing corporations,* United States, 1970-1985 Profit Percentage of Net income Per dollar of sales stockholders' equity (in millions of dollars) (in cents) (annual basis) Before After Before After Before After Year Net sales income tax income tax federal tax federal tax federal tax federal tax 1970 9,839 1,098 569 11.2 5.8 30.3 15.7 1971 10,551 1,217 643 11.5 6.1 29.8 15.7 1972 11,308 1,246 676 11.1 6.0 28.4 15.4 1973 12,205 1,254 704 10.3 5.8 26.4 14.8 1974 14,267 1,354 770 9.5 5.4 26.4+ 15.0+ 1974$ 8,933 1,053 801 11.8 9.0 26.4+ 20.0+ 1975 9,987 1,396 919 14.0 9.2 26.6 16.6 1976 11,964 1,638 1,011 14.3 7.8 28.8 15.9 1977 13,969 1,938 1,239 14.2 9.1 32.0 17.5 1978 15,493 2,591 1,461 16.7 9.4 32.4 18.3 1979 15,331_ 17,471_ 2,740 1,752 17.9 11.-l 30.9 19.2 1980 3,027 2,044 17.3 11.7 31.0 19.8 1981 20,228: 3,560 2,221 17.6 11.0 30.8 19.2 1982 20,126g 3,558 2,354 18.6 11.8 31.4 19.8 1983 21,185: 3,440 2,589 16.2 12.2 29.8 18.5 1984 24,13B9 4,291 3,015 18.3 12.4 34.5 20.8 1985 25,096s 3,596 3,447 22.6 13.8 34.8 21.2 Source: U.S. Department of Agriculture (1980b, 1987). "Includes nontobacco enterprises. `Estimated on the basis of an equity increase of 8 percent. IIndustry classification changed, and foreign subsidiary results were omitted beginning with 1974. For 1974, the new classification resulted in net sales reduced by 37 percent and profits before taxes reduced by 22 percent. Profits after taxes increased 4 percent. SExcludes excise taxes. 42 Historical Context Table 10. Expenditures, farm value, marketing bill, and taxes for cigarettes, United States, selected years Marketing bill' Excise taxes' Consumer Farm State and Year expenditures* value"+ Manufac- Wholesaling/ turingj retailing5 Total Federal local Total 1950 3,586 482 (13)" 757 (21) 681 (19) 1,438 (40) 1,243 (35) 423 (12) 1,666 (47) 1960 6,244 651 (10) 1,537 (25) 1,240 (20) 2,777 (45) 1,864 (30) 953 (15) 2,816 (45) 1970 10,438 718 (7) 2,574 (24) 2,680 (27) 5,254 (51) 2,036 (19) 2,430 (23) 4,466 (43) 1980 19,400 1,445 (7) 4,332 (22) 7,105 (37) 11,437 (59) 2,564 (13) 3,954 (21) 6,518 (34) 1984 28,750 1,478 (5) 8,973 (31) 9,137 (32) 18,110 (63)' 4,749 (17) 4,413 (15) 9,162 (32) 1985 30,250 1,565 (5) 10,349 (34) 9,383 (31) 19,732 (65)' 4,443 (15) 4,510 (15) 8,953 (30) Source: U.S. Department of Agriculture (1987). In millions of dollars. `Estimated by multiplying quantity of domestic tobaccos used in cigarettes consumed domestically by growers' prices from previous year. TDifference between farm value and manufacturers' gross receipts from cigarettes, less federal tax. RDifference between manufacturers' gross receipts and consumer expenditures, less tax. "Percentage of consumer expenditures given in parentheses. %ource data recalculated to correct arithmetic error. Colombia, in 1781, for example, began as a protest against policies affecting the cultivation and market- ing of tobacco under the Crown monopoly (Leonard 1951). Eventually, the deep-seated hatred of the colo- nial monopoly led to the dismantling of most tobacco monopolies (Stein and Stein 1970; Harrison 1952). By the mid-nineteenth century, most tobacco industries in the region had become at least formally private. As Latin American and Caribbean countries be- came increasingly linked to the international system of trade, they experimented with various commodities in which they might enjoy some advantage. Leaf to- bacco was one of these products, and several countries experienced sporadic surges in tobacco exportation. Tobacco production was crucial to government reve- nue in almost all Latin American and Caribbean coun- tries before and after independence from colonial powers (Stein and Stein 1970). The tobacco industry in the region was based on locally grown, dark tobacco, which was used for cigars, snuff, and chewing tobacco in the precigarette era. Dark, air-cured tobaccos of this type were favored in regions with a history of Latin cultural influence. In the late nineteenth century, when cigarettes were first introduced, dark-leaf production for cigars was al- ready well established. Thus, Latin American and Caribbean cigarette manufacturers would naturally produce cigarettes from these dark cigar leaf-cuttings (Brooks 1952). Tobacco manufacturing played a key role in the early economic development of Latin America be- cause tobacco products were logical commodities for local industrialization. Tobacco products were a lux- ury to import, domestic raw materials were readily available, scale requirements were not large, technol- ogy was not unduly difficult to acquire or adapt to local conditions, and leaf production was labor inten- sive. Because tobacco manufacturing provided tax revenue for the state and reduced nonessential im- ports, the industry frequently received considerable tariff protection. However, once the cigarette became the chief form of tobacco use, the evolution of the domestic tobacco industry was soon altered by the sudden appearance of TNCs. In the largest markets of Latin America and the Caribbean, such as Argentina, Brazil, and Mexico, BAT entered the industry fairly early-just before and after World War I-usually by acquiring a local firm (Shepherd 1983). As it aggressively strived to carve out large market shares, BAT often met with opposi- tion from owners of national firms, economic nation- alists, and other groups that feared foreign control of the local economy. In some countries, such as Colom- bia, BAT was unable to gain a permanent foothold in the market despite four attempts from 1919 to 1959 (Shepherd 1983). However, BAT's strategy for dealing with economic nationalism was usually accommodating, and in some countries, local firms often prospered along with BAT subsidiaries. The takeover of these firms by other, mostly U.S., firms in the 1960s led to the "denationalization" of the region's tobacco industry. The entry of U.S. TNCs into the Latin American market in the 1960s had a strong temporal relationship with contraband trafficking in cigarettes, as measured Historical Context 43 by the disparity between recorded world exports and imports (Table 11). USDA acknowledged that the difference was "largely a result of contraband trade, since cigarettes that are shipped and recorded as offi- cial exports by the country of origin are not always reflected in the trade data of the recipient countries" (USDA 1976). The discrepancy is illustrated by the Netherlands Antilles, which imported 4,126 million cigarettes from the United States in 1976. If none of these cigarettes were exported, per capita consump- tion of cigarettes would have been seven times that of the United States at the time (USDA 1977). Table 11. Recorded exportation and importation of cigarettes worldwide, selected years, 195111960* and 1967-1990t Year Exports ~~~ ~~~ ~-~- Percent Imports difference -~-~ 1951 126,735 106,508 16.0 1952 115,324 95,732 17.0 1953 114,869 90,708 21.0 1954 108,317 91,939 15.1 1955 108,420 92,179 15.0 1956 109,717 85,379 22.2 1957 110,129 92,334 16.2 1958 110,484 93,208 15.6 1959 108,609 86,425 20.4 1960 110,428 84,162 23.8 1967~1971$ 136,356 92,058 32.5 1972 178,415 126,016 29.4 1973 191,938 133,306 30.5 1974 203,888 153,615 24.7 1975 222,659 170,778 23.2 1976 235,370 192,076 18.4 1977 257,039 200,406 22.0 1978 279,089 213,558 23.5 1979 301,866 254,855 15.6 1980 322,820 254,250 21.2 1981 340,200 256,810 24.5 1982 331,961 259,737 21.8 1983 319,667 274,318 14.2 1984 331,444 292,323 11.8 1985 355,857 313,253 12.0 1986 363,074 324,805 10.5 1987 405,779 364,530 10.2 1988 460,238 389,888 15.3 1989 508,336 401,490 21.0 1990 543,148 417,951 23.0 Source: U.S. Department of Agriculture (USDA) (1958, 1960,1962,1976,1977,1980a, 1982,1986,1990d). *In thousands of pounds of cigarettes. +In millions of cigarettes. kJSDA stopped publishing data on world trade in cigarettes after 1962 and did not resume until 1976 when it provided the average for 1967-1971. In Latin America and the Caribbean, two exam- ples with different outcomes illustrate the possible effects of contraband. Based on estimates provided by the Colombian government, the proportion of total cigarette consumption attributable to contraband rose from less than 4 percent before 1970 to nearly 18 percent in 1976 (Shepherd 1983). During these years a complex series of events took place, including two licensing agreements for the local manufacture of sev- eral popular TNC brands. The local firms, which con- stituted one of the last nationally owned, private cigarette industries, tried to preserve the market for dark-tobacco cigarettes, and continued to resist entry of the TNCs. Based on estimates by the Argentine govern- ment , apparent contraband rose precipitously-from 2 percent to 12 percent of total consumption in the early 1960s (Shepherd 1979). In 1962, low-duty legal importation was briefly permitted, and contraband, as expected, declined. Several national firms established themselves as exclusive importers of TNC brands. When legal importation was again enjoined, these importers developed licensing arrangements for local manufacture of the same brands. However, contra- band increased, to 15 percent, in 1966; all the nation- ally owned firms were then acquired by TNCs. In the early 197Os, after local versions of TNC brands had been established, contraband declined to 2 percent of total consumption. Nearly 80 percent of the documented, U.S.- owned, TNC subsidiaries in Latin America and the Caribbean were acquired through takeover (Shepherd 1983). Although some European TNCs also entered the Latin American and Caribbean industry in the 196Os, most BAT subsidiaries were established much earlier and, therefore, BAT remains the major Euro- pean TNC in the region. Denationalization has been pursued more aggressively in Argentina, Brazil, Mex- ico, Venezuela, and other markets with considerable potential for growth. In many of the smaller markets, such as those in Peru, Bolivia, and Paraguay, TNCs have settled for licensing arrangements or minority equity positions. TNCs have been established in every national market in Latin America (except in Belize and Cuba) and in several Caribbean countries (Table 12). Because TNC market shares are very large, these firms control almost the entire cigarette industry in the re- gion. Nationally owned tobacco industries survive in only a few countries, such as Bolivia, Paraguay, Peru, and Colombia. These firms are often involved with the TNCs through licensing agreements, and TNC influence continues to increase. After TNCs entered Latin American and Carib- bean cigarette markets, the industry underwent radical 44 Historical Context transformation, especially in Brazil, Argentina, and Mexico. Intense nonprice oligopolistic competition for larger market shares began almost immediately. A five-year period of intense, somewhat evenly divided, competition for market shares was followed by a period of considerable market fluctuation, during which firms with initially large market shares weakened, while firms with small market shares prospered. This period of instability was followed by renewed concen- tration and consolidation (Shepherd 1983,1985). Several factors have contributed to high levels of market concentration in the Latin American and Ca- ribbean cigarette industry. Not all of these factors are directly attributable to TNCs; however, the entry of TNCs accentuated and further concentrated market structure. The history of TNCs in Argentina may serve as an example. Before TNC entry in 1966, seven major tobacco firms operated in Argentina. Sixty-five percent of the total market was evenly divided among locally owned firms, and 35 percent was controlled by a subsidiary of BAT. After a short period of intense oligopolistic rivalry following TNC takeovers, succes- sive mergers reduced the industry to only two firms- a duopoly controlled by BAT and Philip Morris. Thus, the transition in the Argentinean tobacco industry was from loose oligopoly to workable competition and then to renewed concentration and consolidation (Fidel, Lucsngeli, Shepherd 1977). Table 12. Subsidiaries, licensing arrangements, and market shares* of transnational cigarette firms, selected countries of Latin Akerica and the Caribbean, c.1989 Country Argentina Barbados Bolivia Brazil Colombia Costa Rica Chile Dominican Republic Ecuador El Salvador Guatemala Guyana Haiti Honduras Jamaica Mexico Netherlands Antilles Nicaragua Panama Paraguay Peru Puerto Rico Suriname Trinidad and Tobago Uruguay Venezuela British American Tobacco S57 S-98 L-l 6 S-80 S-72 598 S-74 S50 5100 L-NR !+99 558 s-100 S-64 L-NR L-NR S-3_ SlOO S-100 S-77 S73 Philip Morris S-43 L-84 s-8 L-l 527 L-2 S-70 S-80 S-26 S-50 L-NR 540 L-NR S-36 L-NR L-NR s-15 s-23 %27 R.J. Reynolds S-9 520 L-NR S-82 Rothmans Total International output+ 33,700 133 1,200 162,700 18,3009 2,050 9,930 4,473 4,600 1,970 1,997 266 870 2,582 S-100 1,273 49,510 NR 2,400 1,150 2,730 4,200 3,200 528 1,250 3,900 18,035 Market share3 100 98 95 97 43" 99 100 70 100 100 100 100 NR 99 100 98 NR 100 100 NR 20 100 100 100 100 100 Source: U.S. Department of Agriculture (1990b;d); Maxwell (1990b,c,d). S = Subsidiary with significant equity holdings. L = Licensing agreement with a local company (either locally owned or another transnational corporation) in which no equity is owned. Percentage of market share (by volume) follows dash. +NR = Not reported. In millions of cigarettes. fpercentage; excludes export sales (either legal or illegal). *Total consumption is estimated at approximately 27 billion cigarettes a year (Nares 1989). "Transnational corporation cigarette imports account for 43 percent of consumption, as estimated in 1989 (Tobacco lnfernafiod 1989). `These subsidiaries appear to be sales companies that do not manufacture tobacco products. Historical Context 45 In Latin America and the Caribbean, as in the rest of the world, consumption patterns have converged toward TNC product forms. This convergence is partly the result of TNC demand creation and partly the result of the diffusion of industrialized nations' lifestyles-first to the elite in less-developed countries and then to broader portions of the population. Four major shifts have occurred in the consumption of to- bacco products in the last 30 years: first, from all other tobacco products to cigarettes; second, from dark to light tobaccos; third, from unfiltered to filtered ciga- rettes; and, fourth, from short (70 mm) to long (85 mm, 100 mm, and 120 mm) cigarettes. The trend has been toward TNC product forms-that is, long, filtered, light-tobacco cigarettes-and away from the short, nonfiltered, dark-tobacco products of national pro- ducers. In particular, a decisive shift was made to American blend cigarettes, once specific to the United States only. One measure of this shift is the growth in market share of Marlboro cigarettes in several countries throughout the world (Table 13) (Davis 1986). The example of the Dominican Republic demonstrates an extreme case: an increase in market share from 9.3 percent in 1975 to 51.1 percent in 1989. In contrast, because of consequences of the 1911 anti- trust case (see comments earlier in this section), the Philip Morris product cannot be sold in Canada. In Latin America and the Caribbean, the popu- larity of Marlboro cigarettes illustrates the shift in taste from dark-tobacco to light-tobacco cigarettes (Table 14). This shift testifies to the success of TNCs in guiding production and consumption patterns away from local idiosyncrasies (which give local firms an advantage) and toward international patterns. Another consequence of the expansion of TNCs into Latin American and Caribbean markets and the creation of demand was the rapid growth in total output and per capita consumption of cigarettes in the 1960s and 1970s (Shepherd 1983). This increased growth was often in marked contrast to stagnant growth rates reported by nationally owned firms. In Argentina, for example, during 1950 to 1966, sales of domestic cigarettes increased 38 percent, or an average of 2.4 percent per year. After TNC entry in 1966 and 1967, sales increased 58 percent during 1966 to 1975, an average of 6.4 percent per year. From 1950 to 1966, per capita sales increased 5 percent, or 0.3 percent per year; during 1966 to 1975, they increased 37 percent, or 4.1 percent per year (Shepherd 1983). The rapid growth resulted from increased de- mand creation, primarily through advertising and dis- tribution, larger sales forces, and other promotional techniques. Figured on the basis of constant 1960 prices in Argentina, the average annual cigarette ad- vertising expenditure (per 1,000 packs) was 71.6 pesos from 1961 to 1966 but 266.8 pesos from 1967 to 1971- almost a fourfold increase. For the Philip Morris sub- sidiary, reported advertising expenditures were actually larger than reported earnings in 1967, and high levels of advertising resulted in reported losses Table 13. Market share (`%I of Marlboro cigarettes, selected countries, 1975-1989 Year Country 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Latin America Dominican Republic - 9.3 11.3 15.0 18.7 22.1 26.0 31.4 35.0 36.4 38.7 43.4 45.1 49.3 51.1 Mexico - 1.2 1.8 2.7 3.9 5.1 6.5 8.2 8.8 10.1 13.1 14.7 14.3 15.5 20.1 Argentina 0.5 1.2 0.7 1.0 3.2 6.7 6.6 4.0 3.6 4.9 7.0 9.6 10.7 8.9 10.2 Asia Hong Kong - 1.2 2.0 4.3 7.9 12.7 16.9 19.9 20.1 25.9 25.3 27.7 29.4 38.0 36.8 Singapore 1.5 1.6 1.4 4.7 7.5 13.4 15.1 16.7 18.8 19.3 16.9 15.8 20.8 20.3 20.7 Europe Greece 0.3 0.5 1.0 2.4 11.8 10.3 13.9 15.6 16.2 15.2 14.9 16.9 16.8 13.4 14.0 Federal Republic of Germany - - 6.8 8.5 11.0 13.0 14.1 13.8 11.4 14.7 18.5 21.6 23.5 25.4 27.8 Spain - 0.3 0.6 0.5 0.4 0.6 0.6 1.2 1.6 2.2 2.8 3.5 5.0 7.1 8.7 France - 1.1 1.8 2.7 4.2 6.7 8.7 10.6 - 13.8 14.7 15.4 16.2 16.8 18.2 Italy - 7.6 8.8 11.7 11.9 15.6 14.1 11.5 11.1 12.3 14.5 15.2 15.2 15.7 15.5 Source: Maxwell (1990b,c,d). - .~~___~ 46 Historical Context Table 14. Percentage of cigarette sales by type of tobacco blend, selected Latin American countries, 1950-1989 - Argentina Colombia Peru Mexico Year Light Dark Light Dark Light Dark Light Dark 1950 36 64 - - - - 1955 50 50 - 5 95 - 1960 46 54 - - 13 87 - 1965 52 48 - - 19 81 - 1966 55 45 - 33 67 - - 1967 60 40 - 50 50 - - 1968 67 33 10 90 52 48 - - 1969 71 29 11 89 55 45 - 1970 72 28 12 88 57 43 - - 1971 72 28 16 84 56 44 - 1972 72 28 23 77 64 36 - 1973 72 28 24 76 67 33 - - 1974 72 28 25 75 77 23 - 1975 75 25 - - - - - 1976 78 22 - - - 63 37 1977 77 23 - - - 65 35 1978 74 26 - - - 69 31 1979 75 25 - - - - 73 27 1980 75 25 - - - - 76 24 1981 74 26 50 50 - 78 22 1982 75 25 57 43 - - 79 21 1983 75 25 61 39 - - 77 23 1984 75 25 69 31 - 76 24 1985 77 23 69 31 - 79 21 1986 79 21 71 29 - 76 24 1987 80 20 76 24 - - 70 30 1988 83 17 76 24 - - 70 30 1989 - - 77 23 - - 75 25 --_____. ___~. __~. Source: Republica de1 Argentina, Departamento de Tabaco, Secretaria de Estado de Agriculfura y Ganadetia (1978); Maxwell (1989a,b, 1990b,c,d). for three of the five TNCs during 1967 to 1970. After this initial period of intense competition-marked by introduction of new brands and the repositioning or elimination of old brands-advertising and other pro- motional expenditures declined (Shepherd 1983). Despite this rapid growth over a decade or more, the economic results for the TNCs in Latin America and the Caribbean were disappointing in the 1980s because of severe macroeconomic problems and the impoverishment of broad sectors of the population. Toward the end of the decade, the region's per capita gross domestic product declined by nearly 10 percent from the 1980 figure, while per capita income de- creased by nearly 15 percent (Economic Commission for Latin America and the Caribbean 1989; Inter- American Development Bank 1991). Since cigarette consumption has long been recognized as income-elastic, especially at lower levels of income, the decline in per capita income in Latin America and the Caribbean had a depressing effect on cigarette consumption in the region (Figure 2). Per capita cigarette consumption declined some- what uniformly throughout the Americas during the 198Os, but the reasons differ by region. In the United States and Canada, decreased consumption may well have been related to enactment of tobacco-control policies and mounting public awareness of the harm- ful effects of smoking (LJSDHHS 1989). In Latin Amer- ica and the Caribbean, the widespread economic depression almost certainly reduced consumption, al- though growing antismoking efforts may have had a limited impact in some countries. The TNC policy of producing higher-priced, higher-margin products and raising prices to counter decreasing sales may also Historical Context 47 Figure 2. Per capita cigarette consumption in the Americas, 1970-1990 4w 1 United States* Brazil Argentina Latin America* Peru 01 I I / 1 I 1970 1974 1978 1982 1986 1990 Source: Centro Latinoarnericano de Demograffa (1990); US. Department of Agriculture (1990b); Maxwell (1990b). Persons aged 18 years or older. +Persons aged 16 years or older. tPersons aged 15 years or older; excludes Belize and Puerto Rico. have had some impact on decreasing consumption by volume (Shepherd 1985). Financially troubled gov- ernments throughout Latin America and the Carib- bean raised cigarette taxes, which also led to decreased consumption. After having increased in most markets of the region in the 197Os, adult per capita cigarette con- sumption was level or declined in 19 of 20 Latin Amer- ican and Caribbean countries and declined overall in the region by 17 percent in the 1980s. (This reported decline, however, does not consider the potential ef- fect of contraband; see Chapter 4.) In one exception, Colombia, adult consumption increased 14 percent during the 1980s. These data suggest why TNCs have now focused attention on other regional markets, es- pecially those in Asia (Zimmerman 1990). The Future of Tobacco Control In developed, industrialized countries, the de- cline in cigarette consumption has been steep and fairly uniform (Figure 2) (USDHHS 1989). In the United States, adult per capita consumption has decreased to approximately that of the mid-1940s (Fig- ure 1). A similar recent downward trend in consump- tion has also been documented for Canada (Figure 2). This decline has powerfully reinforced TNC pursuit of new cigarette markets, especially in the Third World (Muller 1978; UNCIAD 1978; Clairmonte 1979; Shepherd 1983; Taylor 1984; Dollars 0 Sense 1985; Nath 1986; Heise 1988; Food and Agriculture Organization of the United Nations [FAO] 1989; Wallace 1989; Connolly 1989; The World Bank 1989; Taylor 1989; Crofton 1990; Dollars 0 Sense 1990; Doolittle 1990a,b; Chapman and Wong 1990). The basic system of leaf production, cigarette manufacturing, and leaf exporting in less-developed countries has long been established. For decades, BAT has been promoting these activities throughout the Third World, while also operating as a leaf dealer (Shepherd 1985). In Latin America and the Caribbean especially, and in less-developed countries generally, several factors are likely to make tobacco production and exportation and cigarette manufacturing more important in the near future. 48 Historical Context First, various demographic trends, such as changing population structure and income elasticity, are likely to have a positive influence on cigarette consumption. Second, the emphasis placed on indi- rect taxes, such as excise taxes on cigarettes, is typical of economic austerity programs recommended by some international financial institutions. This empha- sis might force governments of the region to rely even more on the tobacco industry for revenue, thus rein- forcing an already high degree of reliance on cigarette taxation. Furthermore, these debt-related economic austerity programs promote exportation to earn the necessary foreign exchange to repay debts, finance importation, and correct chronic balance-of-payments Conclusions deficits. This process may also lead to greater reliance on leaf-export sectors and even cigarette exportation. In Latin America, the individual smoker-or the young person who considers taking up smoking- stands at the center of complex and changing eco- nomic forces. The TNCs have successfully established market dominance and created demand for their products. In recent years, the overall economic pic- ture has been one of diminished consumption. How- ever, if economic conditions improve in Latin America in the 199Os, growth in cigarette consumption may resume and even increase substantially by the year 2000, as some studies suggest (FAO 1990). 1. Tobacco has long played a role, chiefly as a feature 3. In Latin America and the Caribbean, through a of shamanistic practices, in the cultural and spiri- process of denationalization and the formation of tual life of the indigenous populations of the subsidiaries, a few transnational corporations Americas. This usage by a small group of initiates now dominate the tobacco industry. The current contrasts sharply with the widespread tobacco structure of the industry presents a formidable addiction of contemporary American societies. obstacle to smoking-control efforts. 2. During the latter half of the nineteenth century, 4. After rapid growth in per capita tobacco con- amalgamation of major U.S. cigarette firms coin- sumption in Latin America and the Caribbean tided with the emergence of the cigarette as the during the 1960s and 197Os, a severe economic most popular tobacco product in the United downturn during the 1980s led to a decline in States. tobacco consumption. In the absence of counter- measures, an economic recovery is likely to insti- gate a resurgence of tobacco consumption. Historical Context 49 References BRUCE, P.A. Economic History (of Vir,@ia in tke Sewnteenfk AKEHURST, B.C. To&co. New York: Humanities Press, 1968. Century, Volume I. New York: Macmillan Co. 1895. Reprint. 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Historical Context 55 Chapter 3 Prevalence and Mortality Preface 59 Prevalence of Smoking in Latin America and the Caribbean 61 Introduction 61 Demographic Characteristics 62 Population Configuration 61 Urbanization 62 Educational Opportunities 63 Income Distribution and the Labor Force 64 Prevalence Estimates 65 Prevalence Reported by the Pan American Health Organization 66 Prevalence Reported by the Gallup Organization 67 Prevalence Reported by Reproductive Health Surveys 68 Additional Prevalence Estimates Reported Since 1980 70 Smoking-Attributable Mortality in Latin America and the Caribbean 81 Introduction 81 Mortality Data 81 Coverage 81 Data Quality 82 Coding 83 Life Expectancy and Mortality 83 Trends in Life Expectancy and Overall Mortality 83 Estimates of Mortality 84 Total, Cause-Specific, and Age-Specific Mortality 8.5 Mortality from Smoking-Related Diseases 86 Estimates of Cause-Specific Mortality 86 Estimates of Relative Risk Due to Smoking 87 Smoking-Attributable Mortality 89 Estimates of Smoking-Attributable Mortality Worldwide 89 Lung Cancer Mortality as an Index of Prior Smoking in a Population 89 Estimates of Smoking-Attributable Mortality in the Americas 91 Unadjusted Estimates 91 Adjusted Estimates 92 A Comment on the Methodology 93 Conclusions 97 References 98 Preface In any population, the prevalence of smoking and the demonstrable health effects of tobacco consumption are out of phase. For some diseases, such as lung cancer, the lag may be 20 years or more; for heart disease or adverse outcomes of pregnancy, the lag may be considerably shorter. But the overall burden of disease reflects the cumulatizle long-term impact of tobacco use, or "maturity" of the smoking epidemic. This relationship betzrleen prevalence of smoking and smoking-related disease has been examined in detail for North America and zoill not be reiterated here. Rather, thefocus is on the countries ofthe Americas in which tobacco use is an emerging problem. This discussion juxtaposes estimates of the current prevalence of smoking in Latin America and the Caribbean zuith estimates of smoking-attributable mortality. Both esti- mates attempt to define the dimensions of the current and future health threat posed by tobacco use in the region. Prez~alence and Mortality 59 Prevalence of Smoking in Latin America and the Caribbean Introduction The expansion of transnational corporations into international markets (described in Chapter 2) began in the early 195Os, accelerated in the 196Os, and was characterized by denationalization of local tobacco industries and development of consumer preference for the products of these corporations. In Latin Amer- ica and the Caribbean, these events occurred along with complex social and demographic changes-often characterized as a demographic transition (Omran 1971; Jamison and Mosley 19911--that made the area an attractive market for tobacco. These changes were not uniform throughout the region nor even, in some instances, uniform within a single country. Nonetheless, four main sociodemographic fac- tors have contributed to the potential of the popula- tion in Latin America and the Caribbean to initiate cigarette smoking. These factors are growth of groups likely to smoke, dissemination of an urban lifestyle, greater access to education, and the entry of women into the labor force. These factors are summarized below and related to available data on the prevalence of smoking. Demographic Characteristics Population Configuration The population size and growth rate in Latin America and the Caribbean have been affected pri- marily by changes in the birthrate and death rate; with some regional exceptions, migration and emigration have been less important. Changes in fertility, natal- ity, and mortality have been dramatic (Table 1). In 1930, overall mortality was high in Latin America, and life expectancy was only 35 years, al- though in several countries, such as Argentina, Uru- guay, and Cuba, life expectancy was greater because an export-driven economy (Merrick 1986) had encour- aged environmental and sanitary improvements. Most Latin American countries, however, did not in- troduce widespread methods for control of endemic diseases until after World War II. Between 1950 and 1970, improved methods for the control of major in- fectious diseases of children and adults may have accounted for 30 percent of the increase in life expec- tancy (Palloni 1981). By the 196Os, life expectancy at birth for citizens of most Latin American and Caribbean Table 1. Demographic indicators, Latin America and the Caribbean,* 1950-1990 Indicator 1950-55+ 1955-60 1960-65 1965-70 1970-75 1975430 198&85 198590 Annual growth rate (%)$ 2.73 2.75 2.79 2.60 2.48 2.29 2.17 2.06 Crude birthrates 42.5 41.7 4 ..l 38.0 35.4 32.4 30.6 28.7 Crude mortality rate" 15.4 13.6 12.1 10.9 9.7 8.6 7.9 7.4 Total fertility rate' 5.87 5.90 5.96 5.53 4.99 4.36 3.93 3.55 Life expectancy at birth** 51.9 54.8 57.3 59.2 61.3 63.3 65.2 66.7 Infant mortality rate++ 126 112 100 91 81 70 61 54 Source: United Nations (1991). *Excludes Belize and Puerto Rico. %om July of the first year to July of the last year in each period. *otal increase in population during one year divided by mean population for the same period. _Number of births during one year divided by mean population for the same period; per 1,000 persons. `Number of deaths during one year divided by mean population for the same period; per 1,000 persons. IAverage number of children that would be born during the fertile period of each woman in a hypothetical cohort (in accordance **with the fertility rate by age for the cohort) who was not at risk for mortality before the end of the fertile period. Average number of years that would be lived by a newborn in a hypothetical cohort subject to the mortality schedule in effect at the time. tiNumber of deaths per year among children under one year of age divided by number of births during the same period; per 1,000 persons. Prevalence and Mortality 61 Table 2. Estimated population,* Latin America, the Caribbean, and the United States, 1950-1990 Region 1950 1960 1970 1980 1990 Latin America and the Caribbean Total 165.9 218.1 285.7 362.7 449.9 215 years of age 98.5 (59.4)+ 125.4 (57.5) 164.3 (57.5) 220.2 (60.7) 287.5 (63.9) United States Total 152.3 180.7 205.1 227.8 251.3 215 of years age 111.3 (73.1) 124.5 (68.9) 147.0 (71.7) 176.5 (77.5) 197.0 (78.4) Source: United Nations (1991). `In millions. ?ercentage of total population 215 years is given in parentheses. countries was about 60 years. But since advances were not uniform, less industrially developed countries, such as Bolivia, Haiti, and the Central American coun- tries (except for Costa Rica), reported a life expectancy at birth of less than 50 years. Nonetheless, for the region as a whole, overall crude mortality and infant mortality have declined by over 50 percent since 1950 (Table 1). Through the first half of the twentieth century, the birthrate increased in Latin America, except for the urban populations of some countries (such as Argen- tina and Uruguay) that experienced early economic improvements. After 1965, the birthrate in larger countries, such as Brazil, Mexico, and Colombia, began to decrease, and the region as a whole experi- enced declining fertility. Total fertility has diminished by 40 percent since 1960 (Table 1). As a result of these changes, the population growth rate for Latin America and the Caribbean in- creased between 1900 and 1940, peaked just after World War II, and leveled off at 2.8 percent per year from 1945 to 1965. Since then, the rate of growth has slowed; it is estimated at 2.1 percent from 1985 to 1990 (Table 1). In 1950, the total population of the region was only slightly greater than that of the United States, but by 1990, it was 1.8 times greater (Table 2). Al- though the proportion of the population in Latin America and the Caribbean under 15 years of age has remained high (from 41 percent in 1950 to 36 percent in 1990) compared with that of the United States (from 27 percent to 22 percent), the number of persons aged 15 or over (the main tobacco users) in Latin America and the Caribbean increased dramatically over that in the United States. In 1950, the population aged 15 or over in Latin America and the Caribbean was 13 per- cent smaller than that in the United States; in 1990, it was 32 percent larger. These population shifts have created a large po- tential market of tobacco consumers in Latin America. Further, the trend in the birthrate ensures that a sub- stantial number of young people will continue to enter the market for some time to come. Urbanization Although immigration and emigration have had local effects, they have not had a large effect on the demographic composition of the Latin American re- gion as a whole. However, internal migration has. Large-scale internal migration began in Latin America in the 1930s; by the 195Os, approximately one-third of the population of the region resided in urban areas, and by 1980, two-thirds of the total population was urban (Table 3).' In countries where economic growth began early (Argentina, Brazil, Chile, Colombia, Cuba, Mexico, Uruguay, and Venezuela), approximately 70 percent of the population is concentrated in urban areas, but Haiti, Bolivia, and several Central American countries, such as Honduras, Guatemala, and El Sal- vador, remain primarily rural. The urban lifestyle-which includes social dif- ferentiation, division of labor, greater availability of community services, and greater access to popular goods-has generally characterized Latin American life in the last several decades. Nationwide television networks and an upgraded network of roads link regions and consolidate markets for goods, services, and labor nationwide (Wilkie 1984). Features of urban life are now more available in rural areas as well. ' The definition of an urban area differs from countrv to country. When a uniform definition is used-population centers with more than 20,000 inhabitants-the propor- tion is considerably smaller, although the trend remains the same. 62 Prevalence and Mortality Table 3. Percentage of population living in urban centers, by country in Latin America,* 1950-1980 Census definition of urban area+ 20,000 or more inhabitants Country - Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela Total 1950 1960 62 74 35 24 36 46 60 68 39 53 33 35 51 55 24 30 28 36 36 39 25 34 12 15 18 23 43 51 35 41 36 42 35 36 41 47 57 72 35 63 37 44 1970 1980 78 83 38 45 56 67 75 81 57 64 39 43 60 68 39 50 40 47 39 43 34 37 20 24 28 35 59 66 47 51 47 50 37 42 58 64 82 85 72 79 58 65 1960 1970 59 66 23 27 27 36 51 61 34 44 19 26 39 43 19 30 27 33 18 21 15 16 10 13 11 18 29 35 20 31 33 39 22 27 27 39 60 63 47 59 32 40 1980 70 34 46 68 54 30 48 41 40 25 19 17 24 43 37 41 32 47 66 67 47 Source: Wilkie and Ochoa (1989); Centro Latinoamericano de Demografia (1990). *Excludes Belize and Puerto Rico. `Differs by country. The trend toward urbanization in Latin America has concentrated and consolidated the market for to- bacco products, as it has for most other consumer items. The techniques of demand creation (described in Chapter 2) largely depend on an easily reachable mass audience-an audience which in Latin America has demonstrated persistent relative and absolute growth. Educational Opportunities As a by-product of urbanization, access to edu- cation in Latin America has increased substantially in recent decades. Only 58 percent of the total population aged 6 to 11 years was enrolled in primary schools in 1960 (Table 4). By 1987, this enrollment had increased to 86 percent. Since 1970, enrollment in secondary Table 4. Percentage of population in Latin America and the Caribbean enrolled in school, by age group and sex, 1960-1987 Year 6-11 years 12-17 years Total Males Females Total Males Females 1960 57.7 58.1 57.4 36.3 38.7 33.9 5.7 7.1 4.3 36.9 38.2 35.5 1970 71.0 70.7 71.3 49.8 52.1 47.5 11.6 13.6 9.7 48.3 49.5 47.1 1975 76.3 76.4 76.1 58.0 59.8 56.1 18.9 21.0 16.8 54.3 55.6 52.9 1980 82.4 82.8 81.9 62.6 63.6 61.6 23.6 25.1 22.0 58.8 59.8 57.7 1985 85.2 85.8 84.7 66.2 67.3 65.1 23.8 24.8 22.8 60.4 61.2 59.4 1986 85.9 86.6 85.3 66.7 67.8 65.6 24.2 24.9 23.5 60.8 61.7 60.0 1987 86.3 86.9 85.7 68.2 69.2 67.2 25.1 25.8 24.4 61.8 62.6 60.9 18-23 vears Total Males Females 6-23 years Total Males Females Source: United Nations Educational, Scientific, and Cultural Organization (1989) schools has also increased significantly, and the num- ber of university students has dramatically increased as well-from 500,000 in 1960 to 6 million in 1990 (Brunner 1990). Women continue to have somewhat less access to education than do men, but since 1960, gains in enrollment have been equivalent for both sexes (Table 4). The gains in education have brought a more literate and more discriminating group of consumers to the marketplace. The net effect may be complex- although sophisticated consumers may be more ex- posed to tobacco marketing techniques and are more likely to have disposable income for tobacco products, they may also have better knowledge of the adverse health effects of tobacco use. Data on smoking preva- lence and educational status are ambiguous (see "Prevalence Estimates" later in this chapter). Income Distribution and the Labor Force In Latin America between 1950 and 1980, the agricultural sector of the labor force declined, but both the trade sector and the manufacturing sector in- creased (4.5 percent and 3.3 percent per year, respec- tively) (Economic Commission for Latin America and the Caribbean [ECLACI 1989). In urban areas, more than one-third of the total labor force is employed in these two sectors. A study of occupational stratifica- tion in six countries found a large increase in non- manual employment (De Oliveira and Roberts 1989). But despite an apparent increase in the size of the middle class in Latin America, theunevenness of income distribution still exceeds that of the United States (Table 5). In 1975, high-income groups in Latin Amer- ica accounted for a larger percentage of total income than did the corresponding groups in the United States. Conversely, the lowest income group ac- counted for a much smaller percentage of total income in Latin America than in the United States (7.7 vs. 17.2 percent, respectively). Perhaps more important, how- ever, the average income of the lowest income group in Latin America was one-tenth that of the lowest income group in the United States. These income disparities have persisted into the mid-1980s. For se- lected Latin American and Caribbean countries for which data are available (Table 61, the concentration of income in the upper 20 percent of households is substantially greater than for North America. A critical socioeconomic factor has been the in- creasing entry of women into the labor force. Among developing nations worldwide during the 196Os, the highest percentage of female nonagricultural wage earners was found in Latin America (Anker and Hein 1987). Between 1970 and 1980, the size of the female labor force increased at twice the rate of that of the male labor force (5.1 vs. 2.5 percent, respectively) (ECLAC 1989). The main sociodemographic effect of changes in the labor force has been the creation of a group of middle-income wage earners with increased dispos- able income, a group in which women figure promi- nently. Such a consumer group is of interest to the tobacco industry because it may serve as a focus for creation of demand for tobacco (Ernster 1983). Table 5. Income distribution in Latin America* and the United States, 1960 and 1975 ~- __.~~ -~ ~~~~ ~~~ _~ Percentage of total income Annual income per family+ Income bracket 1960 1975 1960 1975 Latin America 10% richest 46.6 47.3 11,142 15,829 20% below the richest 10% 26.1 26.9 3,110 4,497 30% below the richest 10% 35.4 36.0 2,542 3,636 60% poorest 18.0 16.7 833 1,095 40% poorest 8.7 7.7 520 6-18 United States 10% richest 28.6 28.3 15,538 21,488 20% below the richest 10% 26.7 26.9 13,490 17,807 30% below the richest 10% 36.7 36.9 11,577 15,891 60% poorest 34.8 34.8 6,099 8,276 40% poorest 17.0 17.2 4,976 6,635 Source: Portes (1984). *Excludes Belize, Cuba, and Puerto Rico. `In 1970 U.S. dollars. 64 Prevalence and Mortality Table 6. Income distribution in selected countries of the Americas Country Year Percentage of household income (by percentile group) Lowest Second Third Fourth Highest Highest quintile quintile ouintile auintile auintile 10% Brazil 1983 Canada 1987 Colombia 1988 Costa Rica 1986* Jamaica 1988+ Peru 1985-1986+ United States 1985* Venezuela 1987 Source: The World Bank (1991). Based on per capita income. `Based on per capita expenditure. 2.4 5.7 5.7 11.8 4.0 8.7 3.3 8.3 5.4 9.9 4.4 8.5 4.7 11.0 4.7 9.2 1 10.7 22.8 62.6 17.7 24.6 40.2 13.5 20.8 53.0 13.2 20.7 54.5 14.4 21.2 49.2 13.7 21.5 51.9 17.4 25.0 41.9 14.0 21.5 50.6 46.2 24.1 37.1 38.8 33.4 35.8 25.0 34.2 The four main factors discussed here have all affected prevalence of smoking in Latin America, which is summarized below. The economic signifi- cance of these sociodemographic changes is discussed further in Chapter 4 (see "Economics of the Tobacco Industry"). Prevalence Estimates Systematic surveillance of smoking prevalence has generally not been conducted for most regions of Latin America. Consistent time series and uniform methods of data collection are just now being devel- oped (see Chapter 6). Available information on prev- alence is primarily derived from the following sources: an eight-city survey conducted by the Pan American Health Organization (PAHO) in 1971 (Joly 1977); a set of surveys conducted by the Gallup Orga- nization for the American Cancer Society in 1988 (Gal- lup Organization 1988); and a set of reproductive health surveys conducted by local public sector or private sector agencies, principally sponsored by the U.S. Agency for International Development, with technical as&stance provided by the Centers for Dis- ease Control (CDC). Prevalence data from additional surveys (Tables 16-19) have been compiled by PAHO and are available in a companion document to this report (PAHO 1992). Very few of the almost 150 sur- veys compiled have been formally published, and they differ widely by sampling strategy, target popu- lation, method of weighting and adjustment, and re- porting format. Definitions of various categories of smokers also differ across studies (e.g., heavy vs. light, Table 7. Prevalence of cigarette smoking (%) among persons aged 1.574 in eight cities* in Latin America, adjusted for age and sex,+ 1971 -- Total Men Women Current Former Current Former Current Former City smoker smoker smoker smoker smoker smoker La Plata, Argentina 40 8 58 13 26 5 Sso Paulo, Brazil 37 4 54 10 26 3 BogotA, Colombia 36 7 52 7 24 3 Caracas, Venezuela 36 8 49 21 2 Santiago, Chile 35 5 47 1; 20 4 Mexico City, Mexico 30 5 45 8 17 3 Guatemala City, Guatemala 22 6 36 11 10 9 Lima, Peru 21 4 34 7 7 1 Source: Joly (1977). +In order of prevalence ot current smokers. Adjusted by the direct method, based on the age distribution of respondents. regular vs. occasional, and current vs. former). Most surveys provide crude prevalence for the group exam- ined (number of smokers divided by number of per- sons surveyed), and some surveys report results by age, sex, ethnic group, residence, and occupation. Comparison of prevalence by country or by group within countries is problematic, and the only sum- mary statistics are ranges, distributions, and medians. Prevalence Reported by the Pan American Health Organization by using the combined total population of the eight cities as the standard. The age-adjusted prevalence of smoking ranged from 21 to 40 percent. For men, it ranged from 34 to 58 percent (median = 48 percent), and for women, from 7 to 26 percent (median = 21 percent). The prevalence for U.S. males and females at the time was 44 percent and 30 percent, respectively; however, the figures are not directly comparable to those of the PAHO survey because of methodologic differences (U.S. Department of Health and Human Services [USDHHSI 1989). The 1971 PAHO survey reported prevalence of Most smokers (98 percent) reported that they cigarette smoking for persons in eight major cities of smoked cigarettes rather than cigars or pipes (Joly Latin America (Table 7). Estimates were age-adjusted 19771, and most of them (71 percent of men and 79 Table 8. Standardized ratio* of cigarette smoking among persons aged 15-74 in eight cities of Latin America, by sex and level of education, 1971 No Men Second- Post- Primarv arv Women Second- Post- secondary school No schooling Primary ary school school secondary school City schooling school school Bogota, Colombia Current smoker Former smoker Caracas, Venezuela Current smoker Former smoker Guatemala City, Guatemala Current smoker Former smoker La Rata, Argentina Current smoker Former smoker Lima, Peru Current smoker Former smoker Mexico City, Mexico Current smoker Former smoker Santiago, Chile Current smoker Former smoker SBo Paulo, Brazil Current smoker Former smoker All eight cities Current smoker Former smoker 0.9 1.0 1.0 1.0 0.7 0.8 1.2 2.0 0.8 1.2 0.8 1.0 1.4 1.2 0.9 2.0 1.1 1.1 0.9 0.9 1.4 1.1 0.9 1.1 - 0.8 1.1 1.8 1.4 0.7 1.1 1.0 1.6 0.9 0.9 1.1 0.6 0.7 1.7 2.3 1.1 0.9 1.1 1.0 1.1 0.8 0.8 1.8 0.8 1.1 1.0 1.0 1.6 1.1 0.9 1.2 0.7 0.7 1.2 1.4 0.6 1.2 1.9 1.6 0.8 1.0 1.4 1.3 0.8 0.7 0.5 0.6 1.4 2.1 1.1 1.2 1.1 1.4 1.1 1.0 1.1 0.7 0.8 1.0 1.6 - 1.1 0.9 1.5 1.4 1.1 0.8 0.7 0.9 0.8 1.1 1.1 0.7 0.8 0.2 1.1 1.1 1.2 0.6 0.8 1.5 2.5 0.8 1.5 1.0 1.0 1.1 1.0 1.1 0.9 1.2 1.1 0.6 1.3 1.3 0.9 1.1 1.1 0.9 0.5 1.2 1.1 2.0 0.9 1.1 0.7 1.0 1.1 0.8 0.8 0.9 1.2 0.9 0.8 1.6 1.6 Source: Joly (1977). Each entry represents the age-adjusted rate for the subgroup divided by that for the total sample. Educational categories are assumed to have the same age distributions within each sex group. 66 Prevalence and Mortality Table 9. Prevalence of smoking (%) in 12 Latin American countries, 1988 Total Men Women Current Former Current Former Current Former Country smoker smoker smoker smoker smoker smoker Chile 39 14 41 17 31 11 Uruguay 32 16 44 25 23 9 Colombia 28 16 37 21 18 11 Costa Rica 28 16 35 23 20 10 Peru 22 12 28 19 17 6 Brazil 38 12 40 18 36 6 Ecuador 27 7 39 10 16 5 Mexico 27 10 37 13 17 6 Argentina 35 17 43 25 27 9 Honduras 24 15 36 19 11 12 El Salvador 25 8 38 10 12 5 Venezuela 27 15 32 21 23 11 Source: Gallup Organization (1988). percent of women) preferred light-tobacco cigarettes (Joly 1977). The percentage of smokers who smoked light-tobacco cigarettes was greater among persons with at least a high school education-from 54 to 77 percent for men and from 58 to 89 percent for women. Preference for dark tobacco was much greater among older (55 to 74 years) than among younger (15 to 24 years) persons (40 vs. 14 percent). Although all cities reported a lower prevalence of smoking for women than for men, the difference was less for areas in which overall consumption was higher. For example, in La Plata, Argentina, and Ca- racas, Venezuela, the prevalence of smoking for women was approximately half that for men. How- ever, in Lima, Peru, the prevalence of smoking for women was one-fifth that for men. Furthermore, in almost all sample populations, the age-adjusted prev- alence of cigarette smoking increased with educa- tional level for women but not for men (Table 8). In most areas, the prevalence of smoking for women with postsecondary school education was about two times higher than that for women with no schooling- evidence that education may have served demand creation rather than hazard recognition. However, the incidence of quitting was also greater among better-educated women than among better-educated men; thus, several factors may have been operating simultaneously. In 1971, the proportion of heavy smokers (de- fined as persons who smoke 20 or more cigarettes per day) was greater for men (29 percent) than for women (15 percent). In addition, more men than women began smoking before age 16 (33 percent and 23 per- cent of those who smoke, respectively). Imitation of friends and companions was the reason adolescents most often gave for starting to smoke. Prevalence Reported by the Gallup Organization The only other multicountry survey was con- ducted by the Gallup Organization in 12 countries in 1988 (Tables 9,16-18). Unfortunately, the methods of the 1988 Gallup survey and the 1971 PAHO survey differed substantially. The sampling frame and meth- odology were not reported in detail for the Gallup survey, although some weighting scheme was used, and prevalence was not age-adjusted. Only seven countries were in both surveys. The 1971 PAHO sur- vey focused exclusively on urban areas; the 1988 Gal- lup survey concentrated on urban areas but included rural areas as well. The accuracy and precision of the Gallup survey are difficult to judge, and direct com- parisons with the PAHO survey may be misleading. For example, data from the Gallup survey suggest that the overall prevalence of smoking decreased in the seven countries included in both surveys (Tables 7 and 9), but results from other surveys (Tables 16-18) are not consistent with these findings. Comparisons within each survey may be legiti- mate, although they must still be interpreted with caution. In the 1988 Gallup survey, the overall preva- lence of smoking was higher in countries that under- went early modernization, such as Chile (39 percent), Brazil (38 percent), Argentina (35 percent), and Uru- guay (32 percent). Overall prevalence was lower in Prezwleme nnd Morfalify 67 Table 10. Male-to-female ratio of smoking prevalence in seven Latin American countries, 1971 and 1988 Country 1971 1988 Argentina 2.4 1.6 Brazil 2.7 1.1 Chile 1.8 1.3 Colombia 2.5 2.1 Mexico 2.7 2.2 Peru 5.3 1.6 Venezuela 1.8 1.4 Source: Joly (1977); Gallup Organization (1988). less economically developed countries, such as Peru (22 percent), Honduras (24 percent), and El Salvador (25 percent). In both surveys, a higher proportion of men than women were heavy smokers, although the definition of heavy smoking appears to differ between the two surveys. The difference in prevalence by sex has decreased substantially (Table 10). In several countries (particularly Brazil and Chile), almost as many women as men are smokers. Prevalence Reported by Reproductive Health Surveys Since the late 197Os, CDC, in collaboration with national investigators, has surveyed reproductive health practices of women in Latin America. Most of these household surveys have asked questions about smoking. Additional household surveys of young adults (men and women aged 15 to 24 years) have also asked about smoking practices. These surveys pro- duced weighted prevalence estimates representative of the area studied. The overall results have not been age-adjusted, but age-specific results are directly com- parable. These surveys are discussed together be- cause of the general uniformity of the methods used; other surveys of women of reproductive age are dis- cussed later in this section. Among women of childbearing age, the prevalence of smoking in the late 1980s varied from 6 to 33 percent in the areas studied (Table 11). Again, because of differences in data collection, direct comparisons cannot be made with earlier work, but the data at least suggest that the prevalence of smoking among women in S~O Paulo, Brazil, may have increased-the prevalence for women aged 15 to 44 was somewhat higher in 1986 (31 percent) than that for women aged 15 to 74 in 1971 (26 percent), although lack of methodologic detail pre- vents formal testing. In contrast, the prevalence of 68 Prevalence and Morfalify smoking for women in Guatemala may have declined during that period. Surveys of young adults, conducted in selected Latin American countries in the late 1980s (Table 12), suggest that the smoking initiation rate (also referred to as the rate of smoking uptake) is high in at least some areas. Uptake of smoking is higher in the more- developed countries, although probably in urban areas only. In several countries surveyed (Guatemala, Jamaica, and Costa Rica), prevalence of smoking among young women is low. The increased tendency to smoke among women in urbanized areas is also evident in Brazil (Table 121, where women in the more urbanized southern areas have almost twice the prev- alence of smoking as do women in the northeast. Results from the 1988 survey of young adults in Chile (Valenzuela, Herold, Morris 1989) illustrate some important patterns (Table 13). In this survey, over 1,600 men and women aged 15 to 24 were sam- pled, although the sample size varied for specific ques- tions. In Santiago, 53 percent of the young men and Area Year Brazil+ 1986 Rio de Janeiro 1986 Siio Paul0 1986 South 1986 Northeast 1986 Guatemala3 1983 Guatemala5 1987 Costa Rica" 1986 Jamaica' 1989 Puerto Rico* 1982 U.S.-Mexico Border*' Whites (non- Hispanic) 1979 Mexican-Americans 1979 Table 11. Prevalence of smoking among women of reproductive age W-44 years*), selected areas of the Americas, 1979-1989 Sample Prevalence size (%`c) 5,892 30.6 749 33.0 769 30.8 846 32.2 1,792 29.6 3,670 6.6 5,160 4.0 3,277 12.4 6,112 6.2 2,861 15.6 798 31.6 1,235 18.5 `Age group 1549 years for women in Costa Rica and Jamaica. `All values for Brazil are from Centers for Disease Control (CDC) (1986). tAnderson (1985). kDC (1987a). "Asociaci6n Demogr6fica Costarricense and CDC (1987). _McFarlane and Warren (1989). **Smith, Warren, Garcia-Nwiez (1983). Table 12. Prevalence of smoking among persons aged 15-24, selected countries of the Americas, 1986-1990 Country and city Year Men Women Sample size Prevalence (%) Sample size Prevalence (%) Brazil* 1986 Salvador+ 1987 SBO Pauloj 1988 Curitiba_ 1989 Rio de Janeiro5 1989 Recife_ 1989 Chile (Santiago)" 1988 Costa Rica' 1990 Guatemala** 1987 Jamaica tt 1989 *Centers for Disease Control (CDC) (1986). `Sakamoto, Freire, Morris (1991). *Universidade Federal da Bahia and CDC (1989). %DC (1990a). !Valenzuela, Herold, Morris (1989). :,CDC (1990b). ,,CDC (1987a). ' `National Family Planning Board and CDC (1988) - - 2,479 871 13.9 956 750 33.7 804 950 24.4 913 848 22.5 831 1,154 23.9 989 800 53.3 865 1,405 23.7 1,582 - 2,204 - 2,605 .~. 41 percent of the young women were current smokers, and prevalence of smoking increased with age. For younger people (in these data, persons 15 to 17 years old), the prevalence of smoking approximates the rate of smoking initiation. In Santiago, the initiation rate was 46 percent for men and 34 percent for women. By ages 22 to 24, more than half of both sexes were current smokers, and 22 percent of both sexes stated that they were former smokers. The vast majority of both men 27.3 14.1 26.2 22.0 22.0 12.0 41.0 5.4 2.5 2.6 and women were light smokers: 78 percent of men and 89 percent of women smoked less than 10 cigarettes per day. The proportion of heavy smokers increased with age. With regard to educational attainment and smoking, the 1988 results from Santiago are consistent with those of the PAHO survey of 1971. A greater percentage of educated women were smokers (46 per- cent of women with superior education and 42 percent Table 13. Prevalence of smoking and cluantitv smoked among; persons aged 15-24, Santiago, Chile, 1988 Group Women Total 15-17 18-19 20-21 22-24 Current smoker Former smoker Less than one-half pack per day One-half pack or more per day 41.0 22.7 88.5 11.3 33.9 44.0 36.0 52.1 24.1 20.7 23.8 21.6 93.0 89.4 83.1 86.5 6.0 10.6 17.0 13.5 Men Current smoker 53.3 46.0 60.1 55.2 56.2 Former smoker 22.3 25.4 19.0 20.8 21.9 Less than one-half pack per day One-half pack or more per day Source: Valenzuela, Herold, Morris (1989). 78.2 85.6 75.5 76.5 73.7 21.8 14.4 24.5 23.5 26.3 PrezTaleuce and Mortality 69 Table 14. Prevalence of smoking and quantity smoked among persons aged 15-24, by educational level and sex, Santiago, ChGe, 198h Group Women Current smoker Former smoker Less than one-half pack per day One-half pack or more per day 41.5 24.6 90.1 9.9 Men Current smoker 56.7 Former smoker 23.6 Less than one-half pack per day 79.8 One-half pack or more uer dav 20.2 Source: Valenzuela, Herold, Morris (1989). *l-8 years. +9-l 2 years. b12 years. Basic* or less of women with basic education or less), but the reverse was true for men (47 percent vs. 57 percent for the corresponding educational levels) (Table 14). Women with greater educational attainment also tended to smoke more (one-third smoked more than 10 ciga- rettes per day). The prevalence of smoking as a func- tion of the educational level of the father of the respondent followed the pattern for the educational level of the respondent. History of pregnancy appeared to have little ef- fect on the prevalence of smoking among women in Santiago (Table 15). On the contrary, prevalence of smoking was slightly higher for women who had been pregnant (43 percent) or who had given birth (47 percent) than for women who had never been preg- nant or had never given birth (around 40 percent for both groups). Since the data are not age-adjusted, this difference may result from the generally lower age distribution of women who have never been pregnant. The data suggest that pregnancy has little influence on the smoking habits of the population studied. The data from Chile are not necessarily general- izable to Latin America as a whole, but they support the supposition that smoking is common among young people in some of the more-developed coun- tries and that the quantity smoked is not great. Al- though the results do not permit the calculation of a single estimate of the prevalence of smoking among young people in Latin America, they do suggest that Educational level Middle+ Middle (incomplete) (complete) Superior* 38.4 42.3 46.4 22.4 22.6 20.6 91.8 92.4 66.7 7.5 7.6 33.3 55.0 52.3 46.5 22.4 22.7 19.3 81.4 77.9 66.0 18.6 22.1 34.0 prevalence varies by level of socioeconomic develop- ment and that prevalence may be over 50 percent in some areas. Additional Prevalence Estimates Reported Since 1980 PAHO has assembled prevalence data, as well as some information on knowledge and attitudes, from country-specific surveys (Tables 16-19). Most of these surveys report a crude prevalence for the population studied, and as noted, the methodologies of these surveys differ substantially. Theoverall prevalence of current smoking varies widely in Latin America and the Caribbean-from 6 Table 15. Prevalence of smoking (%I among women aged 15-44, by reproductive history and smoking status, Santiago, Chile, 1988 - Pre nant P At least Smoking Never at east No live one live status pregnant once births birth Current smoker 40.3 43.3 39.6 46.6 Former smoker 22.4 23.3 23.0 21.4 Never smoker 37.3 33.3 37.4 32.0 Source: Valenzuela, Herold, Morris (1989). 70 Prevalence and Mortality percent in rural La Paz, Bolivia, to 49 percent in Port0 Alegre, Brazil. Prevalence of smoking is higher for men than for women. The distribution of results (Table 20) from the surveys of adults (Table 16)--dis- played as a stem-and-leaf plot (Tukey 19771-reveals that the prevalence for men is centered in the 30 to 49 percent range (median = 37 percent); 74 percent of observations were greater than 30 percent. For women, most results were in the 10 to 29 percent range (median = 20 percent); 24 percent of observations were greater than 30 percent. Most reports of low preva- lence for women were from less-developed, predom- inantly rural areas. A similar rural-urban gradient was also found for men. In general, crude prevalence was highest in the Andean region, the Southern Cone, and Brazil (Table 16). Prevalence tended to be intermediate in Central America, Mexico, and the Latin Caribbean and lowest in the other Caribbean countries (Table 16). Lifetime prevalence (51 percent) was reported for men in Ja- maica. For Trinidad and Tobago, a 42 percent preva- lence is given for men in a single urban area. The available information suggests that for male, urban dwellers in the more-developed countries of Latin America and the Caribbean, the prevalence of smok- ing exceeds 50 percent; for rural women in less- developed countries, the prevalence is less than 10 percent. The data do not permit calculation of a single estimate of the prevalence of smoking in the region, since no unified, planned prevalence survey of the region has been attempted. Cigarette smoking was also common among physicians. The range for the 11 studies that reported prevalence among medical students, physicians in training (residents or house staff), and physicians was 17 to 49 percent (Table 16). Prevalence of smoking for adolescents appears to follow a pattern similar to that for adults (Table 17). Prevalence is higher for young men than for young women and higher in urban areas of the more- developed countries. The regional pattern is also similar, except that smoking among young people appears to be more common in the non-Latin Caribbean than in Central America, Mexico, and the Latin Caribbean. The prevalence of smoking for adolescents is high in some areas-perhaps even higher than the prevalence for adults. A prevalence of greater than 30 percent is reported by almost half of the surveys for young men and almost one-third of the surveys for young women. Surveys of women of childbearing age have been conducted in some Latin American and Caribbean countries (Table 18). The results generally confirm those cited earlier (also included, in part, in Table 18). The prevalence of smoking varies considerably; 25 percent of surveys reported a prevalence over 30 per- cent, and more than half reported a prevalence greater than 20 percent. Since women of reproductive age span the adolescent and adult years, younger women may disproportionately contribute to the high overall prevalence of smoking in some areas. The few studies available about public knowl- edge and attitudes with regard to smoking suggest a high level of awareness of the general health hazards of tobacco use (Table 19). One study in Cuba indicated a high level of public approval for an indoor ban on smoking. In contrast, a survey among physicians in Paraguay showed that only 30 percent agreed with the statement that smoking is undesirable. Information on public awareness of the specific health risks of smoking and on the degree to which smokers perceive a personal risk is not available for Latin America and the Caribbean; data for the United States, however, have been considered in detail (USDHHS 1989). Col- lection of such information for Latin America and the Caribbean will be important to enhancing tobacco control in those regions (see Chapter 6). Another aspect of the prevalence of smoking in the Americas is smoking patterns among Hispanic persons who reside in the United States. A large prob- ability survey of Hispanic Americans (Hispanic Health and Nutrition Examination Survey [Hispanic HANES]), conducted in 1982 to 1984, revealed that, for both men and women, the pattern of smoking differs among persons of Mexican origin in the southwest United States, persons of Puerto Rican origin in the New York City area, and persons of Cuban origin in the Miami area. For all three groups, the weighted prevalence of cigarette smoking was higher for men than for women (Table 21). But persons of Puerto Rican or Cuban origin were more likely than persons of Mexican origin to be heavy smokers (Haynes et al. 1990). Compared with the prevalence of smoking for the general U.S. population WSDHHS 19891, the prev- alence of smoking was higher for men of all three Hispanic groups and for women of one group (Puerto Rican origin). The Hispanic HANES survey of 1982 to 1984 also showed that with decreasing income and educational attainment, the prevalence of smoking increases among Hispanic men (Haynes et al. 1990). In addition, for women of Puerto Rican origin residing in the New York City area, the prevalence of cigarette smoking is approximately twice that of women in Puerto Rico (Becerra and Smith 1988). Approximately five years after the Hispanic HANES survey, the National Health Interview Survey (NHIS) revealed that the prevalence of smoking for all these groups had declined substantially, parallel with the decline in prevalence in the general U.S. population (Table 21) (Schoenboml989). Detailed analysis of prev- alence of cigarette smoking among successive birth cohorts, however, shows little reduction for women of Mexican origin and an increase for women of Puerto Rican or Cuban origin (Escobedo, Remington, Anda 1989). Direct comparison with data for populations in the areas of origin is not possible (Table 16) because of differences in sampling methods, but thedata suggest that some trends for Hispanic persons residing in the United States may be the same as those for the general U.S. population (Escobedo, Remington, Anda 1989; Escobedo et al. 1990; Harris 1983). Although preva- lence of smoking has declined among Hispanic men and women, uptake of smoking is increasing among young Hispanic women. In general, persons of His- panic origin in the United States reflect a mixture of the cultural forces in Latin America and North America. Table 16. Prevalence of tobacco use among adults reported by surveys in Latin America and the Caribbean, 1980s and 1990s Re ion % Survey an Country Year Sample area Number Age I Andean Area Bolivia 1983 La Paz 945 1986 Sucre 1,028 1986 Rural La Paz 1,060 1986 Urban La Paz 1,058 1987 Physicians in La Paz 72 215 215 215 215 Colombia 1980 Nationwide 6,277 1985 Medellin (excludes 2,432 persons of low socioeconomic status) 1987 Urban areas 2,400 1988 Nationwide 1,512 Ecuador 1988 Quito, Guayaquil, 3,657 and three rural capitals 1988 Urban areas 1,323 215 216 216 Sponsor Bolivian Cancer Foundation Department of Mental Health Department of Mental Health Department of Mental Health Osorovic and Rios-Dalenz National Institute of Health University of Antioquia Public Health School Drug Survey 18-60+ American Cancer Society/Gallup Organization 20-65 Ministry of Public Health, Our Youth Foundation Peru 1990 Quito 1,805 1980 Households in 2,167 Lima/Callao 1985 Male firearm 359 licensees in Lima 13-60+ American Cancer Society/Gallup Organization 210 Ministry of Public Health 12-45 Police Force, Antidrug Unit 18-70 Police Force, Antidrug Unit Source: Pan American Health Organization (1992). *Given for current daily smokers/occasional smokers, or for the former only. +Smoked during the previous year. Prevalence* (% 1 Men Women Total ____- 41/37 32/33 36/35 35 18 28/41 6 3 6/48 46/38 29/33 38/36 35/17 52 26 39 30+ 43 25 34+ 37 18 28 27127 11/20 22/24 39 16 27 23/27 49/14 23/11 36/13 36/23 72 Prevalence and Mortality Table 16. Continued Region Survey a&I Country Year Sample area Number Peru (contd.) 1987 Lima 1,800 1988 Urban areas 400 1989 Towns >2,500 population 6,761 Venezuela 1984 Nationwide 1986 Caracas 1988 Urban areas 1989 Southern Cone Argentina 1981 1988 Caracas 1988 Buenos Aires 306 Buenos Aires 128 pediatric hospital staff Urban areas 826 Chile 1984 1985 1987 Paraguay 1988 1989 1989 Uruguay 1984 1985 1988 1989 852 400 Santiago 1,050 Twelve cities 2,700 Three communities 1,800 near Santiago Medical students 375 and doctors at Catholic Univer- sity Medical School Less than one-half 394 of all medical students Physicians 837 nationwide Montevideo 396 Ministry of Public 525 Health employees Urban areas 799 Fourth-year medical students in Montevideo Age Sponsor ~~____ 15-50 Peruvian Public Opinion 18-35+ American Cancer Society/Gallup Organization 12-50 Information Center, Education for the Prevention of Drug Abuse Prevalence* (7r) Men Women Total 68 40 28 17 22 42 13 26$ Ministry of Health Ministry of Health 18-64 American Cancer Society/Gallup Organization Ministry of Health 32 23 38 42 27 36 15-74 Alvarez 39 27 20-55 Pediatric Hospital 48 49 18-50+ American Cancer Society/Gallup Organization >15 Public Health School >I5 Gallup Chile >15 Catholic University Department of Public Health 43 27 33 35 34/10 35/16 28/11 30/11 31 32/11 33/13 Estigarribia 25 24 25 16-36 Martinez 18 14 17 20-80 Chaparro 218 Prevention Volunteers 218 Epidemiology Division, Ministry of Health 18-50+ American Cancer Society/Gallup Organization 22-26 Ruocco 35 49/9 45 44 24 32 31/14 40/12 45 45 23 32 24 `Given for current daily smokers/occasional smokers, or for the former only. ISmoked during the previous month. Table 16. Continued Region Survev ana Country Year Brazil 1981 1982 1987 1987 1988 1988 1989 Sample area Number Physicians in Port0 Alegre Medical association P&to Alegre Siio Paul0 Two state capitals 1,297 Twelve state capitals Physicians in Rio de Janeiro Central America5 Costa Rica 1986 1987 1988 Households nationwide Nationwide Nationwide 35,000 2,700 1,213 El Salvador 1988 Nationwide, urban 1,300 Guatemala 1982 1987 1989 1989 Guatemala City 2,403 University of San 170 Carlos students and teachers Urban areas 7,372 Finance Office 350 employees Honduras 1987 1988 Ministry of Health 293 employees Urban areas 1,200 Nicaragua Panama 1988 1983 1986 1989 Employed persons 520 Nationwide 1,631 Health Depart- 11,385 ment employees Health Department 100 pensioners Mexico 1983 1986 1988 1988 1988 Physicians 495 Households 14,528 Urban areas 12,581 National Respira- tory Institute employees Urban areas 2,600 - `Given for current daily smokers. SExcludes Belize. 49 Sponsor Saltz et al. 20-64 Achutti 15-59 Ramos 18-50+ Gallup Organization 18-55 Ministry of Health Campos 215 Office of Statistics 14-60 Alcohol and Drug Dependency Institute 18840+ American Cancer Society/ Gallup Organization 35 14 30 33 11 22 35 20 28 18-40+ American Cancer Society/ Gallup Organization 38 12 25 210 Drug Institute San Carlos Medical School 53 30 47 34 36 34 215 Health Department 38 18 27 Health Department 48 38 44 Ministry of Health 18840+ American Cancer Society/ Gallup Organization ~18 Mount Sinai Medical Center 218 National Cancer Association National Cancer Association 255 National Cancer Association 212 National Health Survey 12-65 Secretary of Health 15-45+ American Cancer Society/ Gallup Organization Prevalence* (X) Men Women Total 26 40 32 27 52 34 45 31 40 36 45 33 28 23 49 38 38 39 36 11 22 24 51 6 41 56 20 10 4 48 13 38 7 33 27 8 38 14 41 18 33 17 26 28 37 17 27 74 Prevalence and Mortality Table 16. Continued Reeion Survev Prevalence* (o/o) ana Country Year Sample area Number Mexico 1989 Physicians in Mexico 818 (contd.) City (telephone) Latin Caribbean" Cuba 1984 Nationwide 4,968 1988 Nationwide 5,933 Dominican 1989 Health Department 704 Republic employees 1989 Nationwide 502 1991 Households in 1,392 Santo Domingo Puerto Rico 1989 Behaviorial Risk 772 Factor Survey, San Juan (telephone) Selected Caribbean countries Anguilla 1989 Islandwide 101 Bahamas 1988 Areawide 933 Bahamas 1989 Areawide 1,000 Jamaica 1987 Household Council 6,007 1987 Household 1,000 Aruba and 1989 Netherlands Antilles Random sample of 623 population (1%) Trinidad and 1981 St. James (Port of 2,491 Tobago Spain) U.S. Virgin 1989 Islands 1989 Household Behavioral Risk Factor Survey (telephone) 2%' population sample after hurricane 141 727 49 Sponsor Menese et al. 217 214 Cuban Institute for Research and Orientation of Internal Demand Cuban Institute for Research and Orientation of Internal Demand Ministry of Health 20-79 Ministry of Health 15-55+ Vincent et al. 218 School of Public Health 23 11 15-74 Health Department 215 Health Department 16-59 Health Department Drug Survey 10/9 20 19 212 210 National Council on Drug Abuse Jamaican Medical Association 51** 25 2/10 7/9 5 11 4 10 15** 6 Ministry of Health 32 13 21 35-69 State government and Medical Research Council (United Kingdom) 42 8 27 218 Health Department 15 Men Women Total 48 26 36 25 22 20 66 14 40% 36 33 35 9 12 11 23 42 *Given for current daily smokers/occasional smokers, or for the former only. "Excludes Haiti. IDefinition of smoking status unavailable. **Smoked during lifetime. Preaaltwe and Mortality 7.5 Table 17. Prevalence of tobacco use among adolescents reported by surveys in Latin America and the Caribbean, 1980s and 1990s Prevalence* (%I -.____- Re ion % Survey an Countrv Year Sample area Number Age Sponsor Men Women Total 51 72 42 63 43 44 61 5 30+ 4 5+ 16+ 6+ 10/22+ 15 15 15+ 16 44 41 64 90 34 71 14 3 69 65 67 37 28 34 51 33 50 75" 32 45 13/15 11 11 16 / 20$ 16+ 27t Andean Area Bolivia 1980 1983 1983 1986 La Paz 18,956 Tarija 120 La Paz 707 La Paz 1,359 Medellin Urban areas 400 Cab, private school 283 14-22 Committee on Drugs 18 Bolivian Cancer Foundation 13-18 Bolivian Cancer Foundation Colombia 1985 1987 1985 lo-15 12-15 16-18 Public Health School Cab, public school 512 National school 7,513 Nationwide 2,599 Nationwide 329 11-25 University of Valle drug survey University of Valle drug survey Education Ministry 10-19 13-19 Ministry of Public Health American Cancer Society/Gallup Organization Lima/Callao 419 12-19 Public school 1,311 <18 Private school 206 <18 University 1,379 15-22 1989 Nationwide 12-19 Police Force, Antidrug Unit Cancer Institute Cancer Institute University of Sacred Heart Drug Abuse Center Caracas 225 12-15 Ministry of Health 1985 1989 Ecuador 1988 1988 Peru 1980 1982 1985 Venezuela 1984 Southern Cones Argentina 1981 1986 Buenos Aires 1,007 15-21 12-15 Chile 1981 Santiago 330 18-20 1986 Rural areas 415 18-20 Tobacco Industry Department of Health Universitv of Conception Department of Health 1986 Uruguay 1975 1980 1984 1987 Santiago 761 Montevideo 10,496 Ten high schools P&to Alegre P&-to Alegre Ten state capitals 1989 Ten state capitals 42,475 18-20 12-16 17-18 10-19 10-19 lo-18 218 lo-18 Brazil Rosito et al. Rosito et al. Barbosa et al. Corlini et al. (Psychotropic Drug Center) 218 1989 Street boys in three cities 1989 Sao Paul0 Corlini et al. 6-18 Moraes et al. 6/27 Source: Pan American Health Organization (1992). Given for current daily smokers/occasional smokers, or for the former only. +Smoked during the previous year. tEver smoked. SExcludes Paraguay. ISmoked during the previous month. 76 Prevalence and Mortality Table 17. Continued Reg;ion Survey akl Country Year Central America' 1986 Sample area Number Belize National Drug Use Survey 12,595 Costa Rica Honduras 1984 1986 Nicaragua 1988 Panama 1984 1989 Mexico 1989 1988 1980 San Jose Preuniversity students 487 15-20 Calderon et al. 17 10 13 694 15-30 National University 29 4 17 High school students 468 in Managua Nationwide 11,383 Private college 464 Secondary students 9,967 First year 88,735 university students Mexico City sec- 3,408 ondary students Latin Caribbean++ Cuba 1988 Nationwide 1,067 Selected Caribbean countries Bahamas 1987 Areawide 4,838 Out-of-school 74 youths In-school youths 4,767 Cayman 1985 Areawide 2,077 Islands French Guiana 1986 Areawide Jamaica 1987 Secondary students Suriname 1988 Seven cities and rural areas Aruba and 1988 Aruba Netherlands Antilles Trinidad and 1985 All secondary Tobago students U.S. Virgin 1988 Household Islands Behavioral Risk Factor Survey `Given for current daily smokers. `Smoked during the previous year. *Ever smoked. "Smoked during the previous month. 2,192 Age Sponsor lo-20 Pride Belize 15-18 University of Nicaragua 1 l-l 8 National Cancer Association 15-19 Department of Health National University Mexican Insitute of Psychiatry 473 13-17 Consumer Institute 8 3 6 United Nations Fund for Drug Abuse 20$ 103 32$ 10-l 7 Drug Advisory Committee 11-13 1 l-21 National Council on Drug Abuse 13-21 24 12 Prevalence* (%) Men Women Total 12$ 40 52 46 10 4 7** 3 3 6 6 42$ 9+ 15$ 23$ 2% 40 19 29$ 7 3 5" 36 12 23 12 17+ 1 l-19 Trinidad and Tobago Government Drug Survey 12-17 U.S. Virgin Islands Government _Excludes El Salvador and Guatemala. **Smoked during the previous week. `+Excludes Dominican Republic, Haiti, and Puerto Rico. "SOccasional smoker. Table 18. Prevalence of smoking among women of childbearing age, selected Latin American and Caribbean countries, 1979-1987 - Survev 1 Number Sponsor Prevalence (%) Country Argentina Brazil Chile Colombia Costa Rica Ecuador Guatemala Mexico Panama Paraguay Puerto Rico Suriname Uruguay Venezuela Year Sample area 1987 Nationwide 1981 Southern Brazil CDCS 1982 Piaui State CDC 1982 Amazonas State CDC 1987 Nationwide CLAP 1983 Santiago 1987 Nationwide 1986 Nationwide 1987 Nationwide 1983 Nationwide 1987 Nationwide 1979 U.S. border 1987 Nationwide 986 1987 Nationwide 1,935 1982 Entire territory 1985 Urban areas 1987 Nationwide 1987 Nationwide 980 CLAP 4,605 CLAP* 1,480 CLAP 2,009 4,187 CLAP EP CDC CLAP CLAP 5,169 CLAP Source: Pan American Health Organization (1992). `Centro Latinoamericano de Perinatologia y Desarrollo Human0 de la Organizacibn Panamericana de Salud. %ix months before pregnancy. *enters for Disease Control. BBefore pregnancy/during pregnancy. Table 19. Public knowledge and attitudes on smoking and health in Latin America and the Caribbean, 1982-1990 38+ 25 27 22 36 58/26_ 21 12 8 7 3 19 4 7 16 26 44+ 34 Country Bolivia Year Sample 1983 344 daily smokers 1983 120 adolescents 1987 72 physicians Question Response (%I Is smoking dangerous? (yes) 83 Is smoking harmful to health? (somewhat 96 or very) Is smoking harmful to health? (somewhat 94 or very) Brazil 1988 P&-to Alegre 1988 PBrto Alegre Is the life expectancy of smokers decreased by smoking? (yes) Is environmental tobacco smoke harmful to children? (yes) 48 100 78 Prevalence and Mortality Table 19. Continued Country Costa Rica Year 1984 Sample Urban students Cuba 1988 Nationwide Guatemala 1989 Treasury employees Honduras 1986 1987 Preuniversity students aged 15-30 Ministry of Health employees in Tegucigalpa Mexico Panama 1989 Students Paraguay Peru 1990 Physicians 1982 Adolescents 1989 Adult smokers Puerto Rico 1989 San Juan Uruguay 1984 Montevideo Venezuela 1984 Nationwide 1984 Caracas 1988 Nationwide 1988 Nationwide 1984 Nationwide 1986 Caracas 1986 Caracas 1986 Caracas 1989 Caracas Question Response (X) Are health risks associated with smoking? (adequate knowledge of such risks) Do you approve of a ban on indoor smoking? (yes) Are health risks associated with smoking? (low level of knowledge) Does smoking cause lung cancer and other diseases? (yes) Do you favor a worksite smoking regulation? (yes) Are you bothered by smoking at your worksite? (yes) Is smoking harmful to health? (yes) Is smoking less harmful than use of other drugs? (yes) Are you bothered when other people smoke? (yes) Is smoking undesirable? (yes) Is smoking harmful? (yes) What is the most important reason to stop smoking? (health) Do you believe that smoking is harmful to the health of smokers? (yes) Does smoking affect health negatively? (yes) Is smoking harmful to health? (yes) Should smoking be restricted in public places? (yes) Should all forms of tobacco advertising be banned? (yes) Is smoking harmful to others? (yes) Are some cigarettes less harmful than others? (yes) Should smoking be restricted in public places? (yes) Should radio and television advertising of tobacco be banned-including indirect advertising? (yes) 81 98 64/56* 50 70 77 90 55 60 30 95 66 89 81 94 83 72 75/81' 53 89 60 so urce: Pan American Health Organization (1992). `Smokers/nonsmokers. Table 20. Modified stem-and-leaf display of prevalence of smoking (%) among adults, selected countries of Latin America and the Caribbean, 1980s and 1990~~ - Men o-9 10-19 20-29 30-39 40-49 50-59 60-69 Women o-9 2 3 4 4 5 6 6 8 8 9 10-19 11 11 11 11 12 13 13 13 14 14 14 14 15 16 17 17 18 18 18 18 20-29 20 20 22 23 23 23 23 24 24 25 26 26 27 27 27 28 29 30-39 30 31 31 32 32 33 33 34 36 36 38 40-49 40 40 45 49 6 10 10 15 18 19 20 23 25 25 25 26 27 27 28 28 32 32 32 33 34 34 35 35 35 35 35 36 36 36 37 37 38 38 38 39 39 40 41 41 42 42 43 43 44 45 45 45 46 48 48 48 48 49 49 51 52 52 53 56 66 68 Median = 37 Median = 20 *Prevalence data from Table 16 are grouped by decile (stem) and listed in ascending order (leaf). The data are from different sources and derive from various methodologies. This display provides a visual overview of the range of measured values. Table 21. Prevalence of smoking (%) among Hispanic persons in the United States, aged 20-74, by ethnic group and sex, selected years Ethnic group and sex 1982-1984* 1987+ Mexican origin (southwest United States) Men 43.6 31.8 Women 24.5 17.4 Cuban origin (Miami area) Men 41.8 23.3 Women 23.1 20.4 Puerto Rican origin (New York City area) Men 41.3 38.6 Women 32.6 24.1 *Hispanic Health and Nutrition Examination Survey, 1982- 1984 (Escobedo, Remington, Anda 119891). `Schoenborn (1989). 80 Prevalence and Mortality Smoking-Attributable Mortality in Latin America and the Caribbean Introduction Births and deaths are the most widely collected and reported health events, and mortality is a stan- dard measure of the health status of a population. Mortality has traditionally been used as an indicator of socioeconomic status and standard of living, espe- cially in countries for which measures of economic productivity are inappropriate. Mortality is a useful measure when setting health priorities, communicating health-related infor- mation, and marshalling political support for a health initiative. It is a measure easily understood by the public, and it can affect the public's perception of risk. For example, the following statement about the United States has a po\sJerful simplicity: "cigarette smoking, alone, causes more premature deaths than do all the following together: acquired immunodefi- ciency syndrome, cocaine, heroin, alcohol, fire, auto- mobile accidents, homicide, and suicide" (Warner 1987, p. 2081). Yet the data that allow such a statement are difficult to assemble, and the methodologies used to determine the number of deaths attributable to smoking are complex (USDHHS 19891. Although useful, mortality data do not indicate the full effect of a disease or set of diseases on a community. They do not describe the pain, morbidity, disability, economic costs, and decreased quality of life of persons who live with an illness, nor do they describe the secondary effects on family members who lose a close relative. However, other measures of the effect of a dis- ease have limitations as well. For example, life expec- tancy, which can express the health status of a population, may be misleading. For developing coun- tries, life expectancy is strongly inff uenced by infant and childhood mortality and much less so by disease prevention or therapeutic advances that affect adult health. People who have died from a smoking-related disease would have lived approximately 15 years longer if they had not been smokers (Warner 1987). This powerful effect is diluted if the improvement in smokers' life expectancy is averaged over the whole population. In the following discussion, an attempt is made to specify the number of deaths in Latin America and the Caribbean attributable to smoking, while keeping in mind the limitations of common disease measures. The result is an approximation, an early step in an iterative process for determining the health impact of tobacco use in the Americas. The methodology, which applies the concept of attributable mortality, is com- plicated by the need to estimate and adjust data to compensate for missing or insufficient data. A step- by-step description of the methodology is provided in Table 22. The effects of the empirical decisions made are discussed at the end of the chapter (see "A Com- ment on the Methodology"). Mortality Data The data in this section are from the PAHO Technical Information System, a data base that in- cludes mortality information. PAHO collects mortal- ity data (by age, sex, and cause of death) from source jurisdictions by using questionnaires, national publi- cations, and other methods. Most of the data are from civil registries, which rely on death certificates com- pleted by health personnel in the field. These mortal- ity data have several problems: the coverage of the population is incomplete, the quality of some data is questionable, and the cause-of-death groupings of the World Health Organization (WHO)/PAHO data col- lection questionnaire limit comparability with other data. Coverage PAHO has estimated that the underregistration of mortality is more than 20 percent in Brazil, Colom- bia, Dominican Republic, Ecuador, EI Salvador, Hon- duras, Panama, and Peru (PAHO 1990b). The diverse reporting standards from various countries necessi- tated several country-specific decisions. In Brazil, for example, the most populous country in Latin America and the Caribbean, the estimated underregistration is approximately 25 percent. The level of underreport- ing differs between areas, although it tends to be worse in the poorer, northern part of the country. The number of reported deaths was used for the whole country, although it is an underestimate. In Paraguay, mortality information is published for only a portion of the country, and the information may not be repre- sentative of the remainder of the country. However, the areas not covered by the mortality registry are geographically defined and include about 40 percent of the population. Thus, reasonably reliable disease rates can be determined for a portion of Paraguay but not for the country as a whole. For this country, data from the well-defined reporting areas only were used; for other countries, similar decision rules were used. Prez~alrircc mrd Mortality 81 Estimate overall mortality For each country, evaluate vital registration and use the portion of the data that provides an accurate population-based mortality estimate. For the 10 jurisdictions without mortality data, use United Nations population schedules and apply mortality rates from countries with similar socio- demographic configurations. Do not correct for underreporting. Exclude and do not correct for ill-defined causes. (Resultant population and mortality estimates are reported in Table 25.) Estimate cause-specific mortality Identify the major smoking-associated disease groups (coronary heart disease; cerebrovascular disease; lung cancer; oral, laryngeal, and esophageal cancer; bladder cancer; and chronic obstructive pulmonary disease [COPDI). Use cause-specific mortality data for countries for which such data are available. For the 10 jurisdictions without such data, use data from four countries representative of the de- mographic and socioeconomic spectrum of the Americas (Guatemala, Colombia, Argentina, and the United States). (Resultant cause-specific mortality estimates are in Table 26.) Estimate relative risk and attributable risk Use U.S. estimates for relative risk since country- specific relative risk is generally not available. Determine the smoking-attributable fraction (SAF) for the United States by using the attributable-risk calculation. Data Quality One measure of the quality of mortality information is the proportion of deaths assigned to the rubric "symp- toms, signs, and illdefined conditions" (Manual oflnter- national Statistical Classification of Diseases, Injuries, and Causes of Death, Ninth Revision [ZCD-91). Currently, the percentage of mortality ascribed to ill-defined Table 22. Method used for calculating smoking-attributable mortality in the Americas Adjust estimates by using an index related to lung cancer Use an index of the maturity of the epidemic that relates the lung cancer rate for each country to that of the United States. For each country, determine an adjusted SAF for each disease by multiplying the index by the U.S. SAF for each disease (Table 32). For each country, multiply the adjusted SAF for each disease by the number of deaths from the disease to obtain smoking-attributable mortality (SAM) (approximately 375,000). Adjust the estimate further Calculate SAM for the United States alone by using this method and compare the result with the official value reported for 1985 (U.S. Department of Health and Human Services 1989). For each cause, calculate the difference between the result from this method and from the official method. Apply these upward adjustments to the cause-specific SAMs: increase COPD by 230R, increase cancers by 10.4% (using the difference in lung cancer esti- mates), and increase other diseases and causes by 16.4% (see footnotes to Table 33). Calculate the adjusted estimate of SAM in the Americas (526,000). causes is greater than 10 percent for 16 of the 39 jurisdictions submitting mortality information (PAHO 1990a). In this analysis, ill-defined causes were excluded from calculations of proportions or rates. Because a decedent may not have received health care or the certifying physician may not have been the physician who treated the decedent, diagnostic 82 Prevalence and MortaZity imprecision may occur. More serious distortion may result because the certifying physician did not have the diagnostic tools necessary for accurately determin- ing the cause of death.* Furthermore, managers of health services may not be willing or able to ensure accurate recording or conduct the diagnostic tests that would yield an accurate diagnosis, especially for the elderly. As a result, assessments of mortality levels and trends are often made by considering disease- specific rates for middle-aged rather than elderly pop- ulations (Doll and Peto 1981). Coding Since 1979, PAHO's participating member states have classified cause of death by using the ICD-9 coding scheme. To store these data, PAHO developed a grouping of causes of death based on, but not iden- tical to, the Basic Tabulation List of the ICD-9. The PAHO grouping is also similar, but not identical, to the groupings used by WHO and CDC. The difference in grouping, which has a variable effect on disease classification, does not affect deaths categorized as due to the following conditions: Com~ition ICD-9 code Coronary heart disease 410414 Cerebrovascular disease 430-438 Lung cancer 162 Cancers of the lip, oral cavity, or pharynx 140-149 Cancer of the esophagus 150 Cancer of the larynx 161 Cancer of the bladder 188 However, PAHO grouped cancers of the pan- creas (ICD-9 157) and kidney (ICD-9 189) with other cancers. Chronic obstructive pulmonary disease (COPD), when coded as ICD-9 490-492 and 496, can- not be isolated in the PAHO grouping. The relevant PAHO categories are "bronchitis (chronic and unspec- ified), emphysema, and asthma" fICD-9 490-493). Thus, unlike the grouping for COPD used in the cal- culation of smoking-attributable mortality (SAM) in the United States (CDC 19911, the PAHO grouping includes ICD-9 493 (asthma) and excludes ICD-9 496. Life Expectancy and Mortality Trends in Life Expectancy and Overall Mortality For all countries and subregions of the Americas, the overall trend is an increase in life expectancy at birth (Table 23). Over the last 35 years in Latin Amer- ica and the Caribbean, the average life expectancy at Table 23. Life expectancy* at birth for persons born during selected periods, by region and count6 Region and country Year of birth 1950-55 1970-75 1985-90 51.8 61.2 66.6 40.4 46.7 53.1 37.6 48.5 54.7 43.9 55.5 61.4 42.1 54.0 62.0 45.3 58.8 62.2 42.3 54.7 63.3 42.3 54.0 64.0 51.0 59.8 64.9 48.4 58.9 65.4 2000 Latin America Bolivia Haiti Peru Guatemala El Salvador Nicaragua Honduras Brazil Ecuador Dominican Republic Paraguay Colombia Mexico Venezuela Argentina Chile Uruguay Costa Rica Cuba 69.7 60.5 59.4 67.9 68.1 68.8 69.3 68.2 68.0 68.2 46.0 59.9 65.9 69.7 62.6 65.6 66.9 67.9 50.6 61.6 68.2 70.7 50.8 62.6 68.9 72.1 55.2 66.2 69.7 71.3 62.7 67.3 70.6 72.3 53.8 63.6 71.5 72.7 66.3 68.8 72.0 73.0 57.3 68.1 74.7 75.8 59.5 71.0 75.2 76.3 Caribbean 56.4 67.1 72.4 74.7 North America 69.1 72.2 76.1 78.1 United States 69.0 71.3 75.4 77.6 Canada 69.1 73.1 76.7 78.5 Source: Centro Latinoamericano de Demografia (1990); Pan American Health Organization (1990a). *Estimates through 1985 are based on actual data. After 1985, estimates are projections based on trends and on comparisons with data from similar countries. birth has increased by about 15 years-from 51.8 to 66.6 years. In North America, the increase was seven years-from 69.1 to 76.1 years, reflecting a slower increase as life expectancy at birth reaches age 75 to 80. Among Latin American and Caribbean coun- tries, the current differences in life expectancy at birth are great-ranging from 53.1 and 54.7 years in Bolivia and Haiti, respectively, to 75.2 years in Cuba. Over the last 35 years, the range has diminished somewhat. 2 Historically, the lack of appropriate diagnostic tools had a major impact on the number of deaths assigned to lung cancer. When diagnostic radiology was introduced in England in the 192Os, the rate of certified lung cancer deaths increased threefold (Pet0 7986). Prmahce mzd Mortality 83 During 1950 to 1955, the range was 28.7 years; today it is 22.1 years, and by the year 2000, it is expected to decrease to 16.9 years. Few Latin American and Ca- ribbean countries are at the low end of the range. Cur- rently, only about 3 percent of the population of Latin America and the Caribbean lives in countries with a life expectancy at birth lower than 55 years, while 86 percent lives incountries with a life expectancy at birth of 65 years or more. All countries except Bolivia and Haiti are expected to achieve a life expectancy at birth of 65 years or more by the year 2000 (PAHO 1990a). Differences in the rate of increase are also evident among countries. For example, although life expec- tancy at birth in Chile and Uruguay is now similar, it increased three times more in Chile than in Uruguay over the last 35 years. In general, the increase in life expectancy at birth was slower in the 1970s and 1980s than in the 1950s. The current life expectancy at birth in Latin America and the Caribbean is equivalent to that in the United States around 1945 to 1950-before many major advances in chronic disease prevention and treatment occurred (PAHO 1990a). Based on the cur- rent rate of improvement, the life expectancy at birth in Latin America and the Caribbean should reach that currently found in the United States by about the first quarter of the next century (Centro Latinoamericano de Demografia 1990). The range of population and mortality parame- ters is illustrated by data for four countries (Guate- mala, Colombia, Argentina, and the United States) that represent the broad spectrum of variation within the Americas (Table 24). This variation highlights the diverse potential effects of smoking on a population. For example, for all deaths in women (excluding deaths from ill-defined causes), the fraction of deaths in women aged 35 or older ranges from 34 percent in Guatemala to 95 percent in the United States. Since most SAM occurs among persons 35 years old or older, it is this group whose health is most affected by a tobacco habit. Estimates of Mortality The PAHO Technical Information System con- tains national mortality data suitable for this analysis for all but 10 jurisdictions in the Americas: Antigua and Barbuda, Bermuda, Bolivia, Guadaloupe, Gre- nada, Haiti, Montserrat, Netherlands Antilles, Nicara- gua, and Saint Pierre and Miquelon. To determine the number of deaths in the Amer- icas attributable to smoking, the number of deaths for these 10 jurisdictions had to be estimated. The United Nations (1989) population estimates for these jurisdic- tions were used for this calculation. Crude population mortality rates and other major mortality parameters were applied by using data for countries in the PAHO Technical Information System believed to be similar with respect to life expectancy, geographic region, per capita gross national product, tobacco consump- tion rates, and other factors. These estimates were used along with others obtained by standard means (Table 25). These nonstandard estimates are sensitive to the choice of country used to model the mortality struc- ture. In general, these are underestimates of actual mortality because of underreporting and because Table 24. Mortality from defined causes,* selected countries, c. 1985 Persons aged 235 years Country Sex Population+ Total Mortality+ Mortality+ Percentage of total mortality Guatemala M 3,914 F 3,826 Colombia M 14,103 F 14,007 Argentina M 15,049 F 15,283 United States M 116,160 F 122,571 Source: Pan American Health Organization (1990b). *Excludes ill-defined causes; see text. +Number, in thousands. 32 11 34 27 9 34 74 45 61 55 39 70 129 110 85 103 89 86 1,080 987 91 975 930 95 84 Prevalence and Mortality Table 25. Mortality from defined causes,* regions of the Americas, c. 1985 Region Latin America Sex M F Andean Area Southern ConeS Brazil M Central Americas Mexico M 39,744 224 F 39,631 171 Latin Caribbean M 12,934 101 F 12,801 87 32 41 26 42 134 60 112 66 63 62 52 60 Caribbean M 3,510 21 17 78 F 3,571 18 15 82 North America" M 128,768 1,179 F 135,410 1,055 1,078 92 1,006 95 1,831 77 1,614 82 3,444 80 All regions of the Americas M 329,301 2,368 F 335,868 1,965 Total 665,169 4,333 Population+ Total Mortality+ 197,023 1,168 196,887 892 40,177 207 39,705 166 24,377 190 24,785 153 Mortality+ 736 592 109 95 159 131 Percentage of total mortality 63 66 53 57 84 86 67,601 367 239 65 67,963 254 177 70 12,190 78 12,002 62 Source: Pan American Health Organization (1990b) *Excludes ill-defined causes; see text. +Number, in thousands. SIncludes Falkland Islands. SExcludes Belize. IlIncludes Bermuda and St. Pierre and Miquelon. mortality from ill-defined causes has been excluded to a high of 92 to 95 percent in North America. Most (as discussed earlier). The resultant estimates of of the population of Latin America lives in countries smoking-related mortality are conservative. where this fraction is between 60 and 70 percent. Total, Cause-Specific, and Age-Specific Mortality The composite of reported and estimated mor- tality indicates that approximately 4,300,OOO deaths occur in the Americas each year; about half of these deaths (2,060,OOO) occur in Latin America (Table 25). In the Americas overall, about 80 percent of deaths occur among persons aged 35 or older; in Latin Amer- ica, the fraction is about 64 percent. The fraction of deaths occurring among persons aged 35 or older varies from a low of about 41 percent in Central America The greatest absolute increase in life expectancy at birth is generally associated with improvements in mortality rates for children. In Latin America, a gra- dient of economic development is associated with increased life expectancy. In general, the death rate for children is lower in more highly developed coun- tries, but the death rate for older persons is similar in various economic settings. For example, in Argentina, the mortality rate per 1,000 persons under five years of age is 7.9, and for persons aged 65 or older, it is 65.8. In Guatemala, the rate for persons under five years of Persons aged 235 years Prevalence and Mortality 85 age is 21.4, but for persons aged 65 or older, it is 67.5 (PAHO 1990a). The gradient of economic development is also reflected in the cause-of-death mortality structure. Among men aged 45 to 64, mortality from heart dis- ease, expressed as a percentage of total mortality, is 11 percent in Guatemala, 27 percent in Colombia, and 37 percent in the United States. But some similarities are emerging. For both the 45 to 64 and the 65 or older age groups, the three leading causes of death for each sex are the same in both Colombia and the United States. For the oldest age group, the leading cause of death- diseases of the heart-is also the same in Guatemala (PAHO 1990a). This pattern-increasing similarity of causes of death-is likely to intensify. As life expectancy im- proves, the epidemiologic profile of a country changes. Countries with a lower life expectancy tend to have a younger population, and the greatest mor- tality is in the younger age groups. In these countries, deaths are primarily due to infections (such as acute respiratory infections and diarrhea), malnutrition, and conditions originating in the perinatal period. As these diseases are controlled and life expectancy in- creases, deaths from chronic diseases-in particular, cardiovascular diseases and cancer-become the dominant health problem (PAHO 1990a). Mortality from Smoking-Related Diseases Estimates of Cause-Specific Mortality The major diseases associated with tobacco smoking include coronary heart disease, cerebrovas- cular disease, COPD, and cancers of the lung, lip, oral cavity, pharynx, larynx, esophagus, pancreas, blad- der, and kidney. In the United States, each of these causes (considering cancers of the lip, oral cavity, and pharynx as a single group) contributes at least 2,000 deaths to the total number of deaths attributable to smoking (USDHHS 1989). The four countries for which population data were assessed (Table 24) and the six smoking-related conditions (Table 26) were the focus of this analysis of the effect of smoking on countries of the Americas. Cancers of the lip, oral cavity, pharynx, larynx, and esophagus were grouped because of the similar smoking- attributable risk for these conditions (USDHHS 1989). Cancers of the kidney and pancreas were excluded because they cannot be specifically identified in the PAHO Technical Information System. The four countries Table 26. Deaths from six major causes as a percentage of all deaths from defined causes,* for persons aged 35 or older, selected countries, c. 1985 Corm-;ry Cormr~ry Cerebro- Cerebro- Oral,+ Chronic vascular vascular laryngeal, obstructive Country disease disease disease disease Lung and esopha- Bladder pulmona-ry All and sext (aged 35-64) (aged 265) (aged 3.564) (aged 265) cancer geal cancer cancer diseases categories Guatemala Men 2.2 3.6 1.2 2.5 0.1 0.3 0.1 1.2 11.2 Women 1.6 3.2 1.8 3.8 0.4 0.1 0.0 1.1 12.0 Colombia Men 6.3 10.1 3.4 6.8 2.1 1.6 0.3 1.9 32.5 Women 4.7 10.2 4.7 9.5 1.3 1.0 0.2 1.8 33.4 Argentina Men 4.8 8.1 3.6 7.0 5.6 2.5 0.9 1.2 33.7 Women 1.6 8.6 2.7 9.9 1.1 0.8 0.2 0.9 25.8 United States Men 7.6 21.3 1.0 5.0 8.5 1.5 0.7 1.3 46.9 Women 2.8 24.1 1.0 8.9 4.2 0.6 0.3 0.9 42.8 Source: Pan American Health Organization (1990b). *Codes from Manual uflntm~ational Stntistical Classification of Diseases, [Injuries, ad Causes of Death, Ninth Revision: coronary heart disease, 410-414; cerebrovascular disease,430438; lung cancer, 162; cancers of lip, oral cavity, and pharynx, 140-149; cancer of the esophagus, 150; cancer of the larynx, 161; cancer of the bladder, 188. `Cancer of the lip, oral cavity, and pharvnx. SThe denominator for each row is the total number of deaths from defined causes, by country and sex. %ee text for a description of this rubric. 86 Prevalence and Mortality chosen represented four different points on the spec- trum of mortality rates. Guatemala was chosen, even though its lung cancer rate is low, because it reports nationwide mortality statistics and has one of the low- est levels of life expectancy in Latin America. For persons aged 35 or older, the distribution of deaths from the six major causes was expressed as a percentage of all deaths from defined causes (Table 26). Because SAM from coronary heart disease and cerebrovascular disease differs significantly between persons aged 35 to 64 and persons aged 65 or over (USDHHS 1989), estimates for both these age groups are presented. For all six smoking-related illnesses and age sub- categories taken together (Table 26, last column), the proportion of deaths caused in persons aged 35 or older differed among the countries. In Guatemala, these diseases accounted for slightly over IO percent of adult deaths. In Argentina and Colombia, they accounted for 25 to 33 percent of deaths, while in the United States, they contributed approximately 45 per- cent of deaths. To estimate the number of deaths from smoking- related conditions for subregions of the Americas (Table 27), both the reported mortality data (Table 25) and synthetic mortality estimates for the 10 jurisdic- tions without data were used. For these jurisdictions, the mortality distribution patterns from the four se- lected countries (Table 24) were applied, as described. Substantially more deaths in North America than in Latin America and the Caribbean were attrib- uted to coronary heart disease, lung cancer, and blad- der cancer. The number of deaths was similar in North America and in Latin America and the Carib- bean for cerebrovascular disease, COPD, and oral can- cer. Using these estimates, 81 percent of lung cancer deaths in the Americas occur in North America. When accounting for underreporting, the proportion is prob- ably closer to 75 percent. (Using a different approach, other researchers have estimated that North America accounts for 77 percent of lung cancer deaths [Parkin, Laara, Muir 19881). Because lung cancer is a strong indicator of all smoking-attributable diseases, a rough approximation suggests that the number of deaths in Latin America and the Caribbean attributable to smoking will be about one-third to one-fourth of the number in North America. Estimates of Relative Risk Due to Smoking Relative risk is defined as Y = &1)/d(O), where d(l) and d(O) are the incidence of a particular disease for exposed and unexposed cohorts, respectively. For current smokers, the relative risk for a disease estimates the increase in disease incidence associated with a history of smoking. This risk varies widely among population groups due to differences in smoking- related factors, such as person-years of smoking con- tributed by heavy smokers, age at initiation, and ciga- rette product smoked. For example, among current smokers in a population, the relative risk for lung cancer would be expected to be relatively low if a sizable proportion of the population recently began to smoke heavily. If, however, heavy smoking has been common since World War II, the risk would be rela- tively high. The main reason for this effect is that the exposure category defined by "current smokers" is based on current rather than past smoking habit, but lung cancer rates primarily depend on smoking pat- terns of 20 or more years ago. For many of the smoking-related causes of death, few country-specific estimates of relative risk are available for Latin American and Caribbean popula- tions, and most have focused on cancer. For current cigarette smokers in the United States, aged 35 or older, the estimated relative risk for lung cancer is 22.4 for men and 11.9 for women (USDHHS 1989). In Cuba, the relative risk is 14.1 for men and 7.3 for women. Dark tobacco is the variety of tobacco most commonly smoked in Cuba and many other areas of Latin America. In Cuba, dark tobacco is associated with a higher relative risk for lung cancer than light tobacco is: for men, 14.3 and 11.3, respectively, and for women, 8.6 and 4.6, respectively (Joly, Lubin, Car- aballoso 1983). In Colombia, the relative risk for lung cancer among current smokers was 10.3 in one case- control study of 102 persons with lung cancer, 74 percent of whom were men (Restrepo et al. 1989). The study in Colombia also reported relative risk for cancer of the bladder, larynx, and oral cavity/ hy- popharynx of 3.7, 37.9, and 11.2, respectively. In La Plata, Argentina, where the rate of bladder cancer is high, a relative risk of 7.2 for bladder cancer was found for men who were current smokers (Iscovich et ~31. 1987). In a study of 232 cases of cancer in Brazil (87 percent of patients were men), the relative risk for cancer of the tongue, gum, floor of the mouth ~1~1 other parts of the oral cavity was 9.3 for current snlok- ers of manufactured cigarettes (Franc0 et al. 1989). 11~ a 1966 case-control study of male cigarette smokers and nonsmokers in Puerto Rico, the relati\,e risk \VII~ 1.5 for esophageal cancer, 1.1 for cancer of the scroll cavity, and 2.7 for cancer of the pharynx (Martine' 1969). In Montevideo, Uruguay, the relati\,e risk for laryngeal cancer was 35.4 for male smoker5 Of d&irk tobacco and 14.7 for male smokers of light tobacco (IX Stefani et al, 1987). For comparison, for U.S. mc'il \\`llo Table 27. Deaths (in thousands) from six major causes, * for persons aged 35 or older, selected regions - of the Americas, c. 1985 _.~. ~~__~ Coronary Coronary Cerebro- Cerebro- heart heart vascular vascular Re ion Fi disease disease disease disease Lung an sex (aged 35-W (aged 265) (aged 3S64) (aged 265) cancer Oral,+ laryngeal, and esopha- geal cancer Bladder cancer Chronic obstructive p;;ye;;;q " Latin America Men 38.1 Women 16.7 Andean Area Men 5.5 Women 3.1 Southern Cones Men 7.3 Women 2.2 Brazil Men 16.6 Women 7.2 Central America" Men 1.0 Women 0.5 Mexico Men 4.2 Women 1.9 Latin Caribbean Men 3.5 Women 1.8 Caribbean Men 0.8 Women 0.4 North America' Men 82.2 Women 27.8 All regions of the Americas Men 121.0 Women 44.9 Total 165.9 59.7 28.5 49.8 22.4 14.1 3.0 15.6 53.2 22.6 55.5 6.8 4.0 1.0 11.3 8.7 3.2 6.1 2.1 1.3 0.3 2.0 7.6 3.3 7.2 1.0 0.6 0.1 1.8 13.8 5.5 11.9 8.2 3.9 1.2 2.9 12.6 3.7 14.4 1.4 1.1 0.3 1.7 19.3 15.7 21.0 6.1 6.2 0.9 4.8 17.5 11.5 21.7 1.9 1.4 0.3 2.7 2.0 0.5 1.3 0.3 0.2 0.05 0.6 1.6 0.6 1.5 0.2 0.01 0.02 0.5 7.1 2.3 5.6 2.8 1.1 0.3 4.5 6.3 2.2 6.8 1.3 0.4 0.1 3.8 8.9 1.4 3.9 2.5 1.4 0.3 0.9 7.5 1.3 3.9 0.9 0.4 0.1 0.7 1.2 0.7 1.9 0.4 0.3 0.1 0.3 1.1 0.6 2.2 0.1 0.1 0.03 0.2 230.3 11.2 54.7 92.0 16.4 7.5 14.2 242.2 9.6 89.8 41.7 6.1 3.4 9.2 291.2 40.4 106.3 114.4 30.8 10.6 30.1 296.5 32.8 147.5 48.5 10.1 4.4 20.6 587.7 73.2 253.8 162.9 40.9 15.0 50.7 Source: Pan American Health Organization (1990b). *Codes from Manual of Intertrational Statistical CIassificatim of Diseases, I?rjuries, fl?~d Cawes (?f Dmth, Ninth Revision: coronary heart disease, 410414; cerebrovascular disease, 43&438; lung cancer, 162; cancers of lip, oral cavity, and pharynx, 14G149; cancer of the esophagus, 150; cancer of the larynx, 161; cancer of the bladder, 188. `Cancer of the lip, oral cavity, and pharynx. % ee text for a description of this rubric. _Includes Falkland Islands. "Excludes Belize. `Includes Bermuda and St. Pierre and Miquelon. 88 Prevalence and Mortality are current smokers, the relative risk for cancer of the bladder is 2.9, cancer of the esophagus 7.6, cancer of the larynx 10.5, and cancer of the lip, oral cavity, and pharynx 27.5 (USDHHS 1989). Two case-control studies were conducted to in- vestigate the factors associated with esophageal can- cer in Uruguay, which has one of the highest rates of esophageal cancer in the world. In one study of 226 cases, the relative risk was 6.5 for ever smokers (82 percent were men) (Vassallo et al. 1985). In the other study of 199 cases, the relative risk was 5.7 for current male smokers (De Stefani et al. 1990). In bordering southern Brazil, which also has a high rate of esopha- geal cancer, the relative risk was 8.4 for male smokers (Victora et al. 1987). For countries for which relative risk estimates were lacking, relative risks were derived from U.S. data and used in the following computations of SAM (USDHHS 1989, 1990). Small differences in relative risk estimates are unlikely to have a large overall effect on SAM because of the structure of the formula for calculating attributable risk (see below). Smoking-Attributable Mortality Estimates of Smoking-Attributable Mortality Worldwide Interest in attempting to quantify the extent of the health hazard caused by tobacco led to develop- ment of smoking-attributable fractions (SAFs). These values estimate the proportion of cases of a specific disease in a population that can beattributed to smoking. SAF = P(u-ll--- 1 +p (r-l) in which p is the proportion of the population that has ever smoked and Y is the risk for ever smokers relative to never smokers. The SAF calculated for each disease of interest is multiplied by the number of deaths for that disease, and the result is the SAM for that disease. The sum of SAM values for all diseases associated with tobacco use gives the total number of deaths attributable to smoking. The SAF can be refined to account for differences in smoking status (never, current, or former smoker) and for age and sex subgroups. Smoking prevalence and relative risk can be estimated for each of these subgroups. SAFs have been calculated for 10 selected causes of death in the United States (Table 28). Recent studies have estimated the number of deaths attributable to smoking in the United States (Table 29). The estimates by Rice and colleagues, Table 28. Smoking-attributable fraction for 10 selected causes of death, United States, 1985 Men Women ~~~ ~~~ L?) ~ (7c'c) 45 41 21 12 51 55 24 6 90 79 92 61 81 87 78 75 29 34 47 37 48 12 84 79 -. Cause of death Coronary heart disease (aged 35-64) Coronary heart disease (aged 565) Cerebrovascular disease (aged 35-64) Cerebrovascular disease (aged 265) Cancer of the lung Cancer of the lip, oral cavity, and pharynx Cancer of the larynx Cancer of the esophagus Cancer of the pancreas Cancer of the bladder Cancer of the kidney Chronic obstructive pulmonary disease Source: U.S. Department of Health and (1989). Human Services CDC, and USDHHS all considered smoking status, age, and sex. The estimates vary for several reasons: the diseases included, the specific methodology used, the target year, and the source of the smoking preva- lence data and the relative risk estimates. The most recent (1988) estimate for the United States (434,000 smoking-attributable deaths) is discussed in Chapter 4, "Economic Costs of the Health Effects of Smoking." The 1985 estimate is used here to maintain consistency with data available for Latin America and the Caribbean. SAM has been estimated for many European countries (Table 30), and the current worldwide esti- mate is 3 million smoking-attributable deaths per year. The methodology described earlier for calculat- ing SAM can be used for countries for which reliable information is available on smoking prevalence and on the risk for major tobacco-associated diseases among ever smokers relative to never smokers. Un- fortunately, few countries in Latin America have such data; an alternative methodology for calculating SAM is described below. Lung Cancer Mortality as an Index of Prior Smoking in a Population Numerous attempts have been made to describe the relationship between smoking habits and mortality Prezahce nud Mortality 89 Table 29. Smoking-attributable mortality smoking habits of the population, as expressed by the in the United States risk of dying from lung cancer. Reference Rice et al., 1986 U.S. Office of Technology Assessment, 1985 Centers for Disease Control, 1987b Year Estimate 1980 270,000 1982 314,000 1985 320,000 for R(US,N-Sj < R(C) < RKIS) U.S. Department of Health and Human Services, 1989 1985* 390,000 in which R(C) is the lung cancer mortality rate for a country in the Americas, R(US) is the lung cancer rate for the United States (Table 31), and RtUS,N-S) is the lung cancer rate for never smokers in the United States (12.7 for men and 11.1 for women). When R(C) is greater than RfUS), the index is arbitrarily set to 1. The index has the following properties: o It equals 0 for the few countries in Latin America and the Caribbean with a lung cancer rate below that of never smokers in the United States. o It equals 1 for countries that have a lung cancer rate higher than that of the United States (although there were none). *The 1985 estimate (rather than the 1988 estimate of 434,000 reported in Chapter 4, Table 1) is used here to maintain consistency with the demographic and vital data available for Latin America and the Caribbean. from lung cancer in a population. Many of these attempts have not been entirely successful, primarily due to the lack of key information. Current lung cancer mortality rates reflect smoking habits of 20 to 40 years ago. Reliable data on lung cancer incidence and mor- tality are available for many industrialized countries, but only limited information is available on previous smoking habits. Furthermore, the relationship between smoking and lung cancer is affected by many factors. Duration of smoking is the factor most strongly corre- lated with risk for lung cancer. For example, when duration of regular tobacco use is doubled from 15 to 30 years, lung cancer incidence increases about 20-fold Pete 1986). Other factors that affect lung cancer risk include number of cigarettes smoked per day, age at initiation, tar yield of tobacco products, use of filters, blend of tobaccos, and depth of inhalation. Many of these factors vary over time, not only for a national population but for individuals within a population. Only in recent years have surveys in a few industrial- ized countries collected data on these factors in some detail. Thus, data are unavailable for building an optimal model of smoking habits and lung cancer risk. Nevertheless, tobacco consumption is highly correlated with lung cancer; the SAF has been calcu- lated at over 90 percent for countries that have popu- lations with a long history of high prevalence of heavy smokers (Table 31). This strong association suggests that lung cancer mortality can be used as a surrogate to measure the impact of smoking on a population. The following index (0 uses lung cancer mortal- ity rates for the population aged 55-64. This index, a measure of smoking maturity in a population, con- tains population risk factor information related to the o It falls between 0 and 1 for countries with a lung cancer rate between the U.S. rate for never smokers and the overall U.S. rate, and the value increases as the country's rate approaches that of the United States. This index can be used to develop estimates of SAM for countries in Latin America and the Carib- bean. For a given country, the lung cancer rate and index are calculated, and this lung cancer index is used to adjust all diseases. The index is multiplied bv the disease-specific SAF for the United States to obtain an adjusted disease-specific SAF for a specific country. The number of deaths from a specific cause is then multiplied by the adjusted SAF to obtain the SAM. Thus, the index adjusts the SAF downward-to a level appropriate for the extent of lung cancer in the population. The index is nonlinear; large changes in the upper range of lung cancer rates have only a small effect on the SAF. But changes in the lower range, closer to the rate for never smokers, have a proportionately larger effect on the SAF. In Table 31, the SAF is given with and without the index adjustment. The index uniformly offers a more conservative estimate of SAF. Because of the potential for diagnosis of lung cancer to be more inadequate in some elderly popula- tions than in younger populations, and because of the need to choose a relatively stable measure of smoking habits, the lung cancer rate for persons aged 55 to 64 was used in creating the index. If older age groups are used, significant diagnostic misclassification occurs, and the relationship to smoking is more tenuous. The low rates for younger age groups render the rate estimates 90 Preztalence and Mortality Table 30. Estimated number of deaths due to tobacco use in 27 countries of the World Health Organization (WHO) European Region* Country Austria Belgium Bulgaria Czechoslovakia Denmark Finland France German Democratic Republic Germany, Federal Republic of Greece Hungary Iceland Ireland Israel Italy Luxembourg Malta Netherlands Norway Poland Portugal Romania Spain Sweden Switzerland United Kingdom Yugoslavia Total for region Total worldwide Year 1985 1984 1984 1984 1985 1984 1984 1984 1985 1984 1985 1984 1983 1984 1981 1985 1985 1985 1984 1985 1985 1984 1980 1985 1985 1984 1982 1991 Male Female 5,527 3,354 8,905 2,664 6,129 3,215 14,693 7,363 5,531 3,311 4,094 1,900 25,751 10,102 12,393 6,178 49,572 26,433 5,305 1,718 10,742 5,541 115 78 2,754 1,449 1,416 859 39,489 15,324 298 121 115 54 12,140. 3,892 3,046 1,553 23,858 7,337 3,656 1,778 12,178 7,907 14,492 5,738 7,104 4,339 4,299 1,610 60,764 33,916 9,103 3,732 343,469 161,466 Total 8,881 11,569 9,344 22,056 8,842 5,994 35,853 18,571 76,005 7,023 16,283 193 4,203 2,275 54,813 419 169 16,032 4,599 31,195 5,434 20,085 20,230 11,443 5,909 94,680 12,835 504,935 3,000,000 Source: WHO (1988, 1991 [for worldwide estimate]). Represents about 6OYG of the regional population. Tobacco is held responsible for about 90% of all deaths from lung cancer, 75% of bronchitis/emphysema deaths, and 257c of all deaths from ischemic heart disease. The estimate for each country is based on the most current data provided to WHO by the countries themselves. unstable. Further, the use of a single, well-defined group at risk has the virtue of simplicity-data di- rectly available to a country are used, and adjustment that might be necessary for cross-country compari- sons is avoided. Estimates of Smoking-Attributable Mortality in the Americas Unadjusted Estimates Before adjustment, approximately 375,000 deaths in the Americas were attributable to smc.king around 1985 (Table 32). These were distributed by disease as follows: Disease Total SAM Coronary heart disease 144,200 Cerebrovascular disease 46,800 Lung cancer 128,600 Oral, laryngeal, and esophageal cancer 23,200 Bladder cancer 5,700 COPD 27,300 In Latin America and the Caribbean, an interme- diate estimate of 64,000 smoking-attributable deaths was obtained, and most of these deaths were from coronary heart disease (about 18,500), cerebrovascular disease (about 17,000), and lung cancer (about 13,000). The largest contribution to SAM in Latin America was made by Brazil, followed closely by the Southern Cone subregion. Prezlalence and Mortality 91 Table 31. Smoking-attributable fraction (SAF) and adjusted SAF for lung cancer mortality, selected industrialized countries, 1978-1981 Index of Crude lung Country Sex cancer rate* SAF smoking maturity A%Fd Canada M 142.8 .90 .92 .85 F 34.0 .71 .77 .60 England and Wales M 228.5 .94 1 .oo .92 F 63.3 .80 1.00 .78 Japan M 64.8 .83 .58 .53 F 21.0 .58 .50 .39 Sweden M 85.0 .83 .69 .63 F 28.0 .57 .66 .51 United State& M 166.7 .92 1 .oo .92 F 50.0 .78 1.00 .78 Source: Adapted from International Agency for Research on Cancer (1986). :For persons aged 35 or older. The calculation actually uses the rate for persons aged 5544 years. Difference between SAF and adjusted SAF .05 .ll .02 .02 .30 .19 .20 .06 .oo .oo :Calculated by multiplying the SAF for the United States by the country-specific index of smoking maturity; see text. +Total population. SAM was calculated as the percentage of deaths exclusion of deaths attributed to ill-defined causes. for persons aged 35 or older (last column of Table 32). SAM was adjusted for the first four of these factors as For the Latin American subregions, the proportion follows. For the United States, the estimate of SAM was highest for men in the Southern Cone and lowest was calculated and compared with that made for 1985 for men in Central America. In the Southern Cone, the KJSDHHS 1989). The latter estimate, which provided difference in the rate for men and women reflects a a benchmark, was 37.2 percent larger than the estimate large historical difference in the rate of tobacco con- computed in this analysis. The percent difference be- sumption (see "Prevalence of Smoking" earlier in this tween these two estimates was used to alter upward chapter). The lung cancer mortality rate for women in the estimates for the other countries in the Americas. Peru was less than that for U.S. women who were The adjustments were made by cause (Table 33, see never smokers. The index was zero, and by this footnotes), since the degree of underestimate varied method, no deaths were attributable to smoking. with the condition. Adjusted Estimates The estimates of SAM (Table 32) are under- estimates for several reasons: (1) COPD was un- dercounted due to differences in cause-of-death groupings; (2) cancers of the kidney and pancreas were omitted; (3) the SAF for cancers of the oral cavity, esophagus, and larynx is an underestimate (the three cancers were grouped, and the smallest SAF for the three was used); (4) other categories of disease or death were omitted, including other types of cardiovascular and respiratory disease, cervical cancer, infant deaths due to maternal smoking during pregnancy and post- natal exposure to environmental tobacco smoke, lung cancer deaths due to passive smoking, and deaths from smoking-related fires; and (5) an undercount of deaths due to both underregistration of cases and the After adjustment, an estimated 526,000 annual deaths in the Americas are attributable to tobacco use; about 100,000 of these are in Latin America and the Caribbean. About two-thirds of these deaths occur in Brazil and the Southern Cone. The estimated 36,000 deaths for Bermuda, Canada, and St. Pierre and Miquelon correspond closely with estimates derived by using several different methods and previously reported for Canada alone (Collishaw, Tostowaryk, Wigle 1988; PAHO 1992). As discussed below, the 100,000 annual deaths in Latin America and the Car- ibbean, estimated from data for the mid-1980s, is conservative. If the current U.S. SAF is applied and if Latin American and Caribbean countries follow a tra- jectory similar to that of North America, over 1 million smoking-attributable deaths per year will occur in Latin America and the Caribbean by the year 2030. 92 Prevalence and Mortality A Comment on the Methodology The attribution of mortality requires an empiri- cal approach. In the method used here, which varies somewhat in detail, but not in fundamental approach, from other methods (WHO 19891, at least five basic empirical decisions were made. First, the analysis excluded mortality data for which cause of death was inadequately specified, and no attempt was made to adjust for the underreporting of deaths. Second, syn- thetic estimates of mortality structure were used for countries with little or no data. Third, a proration was used to adjust for causes of death that could not be analyzed by using PAHO data. Fourth, an empirical index was developed to adjust for the many factors that influence the risk that smoking imposes on a population. Fifth, the SAM calculation made for the United States (USDHHS 1989) was used as a bench- mark for adjusting the estimates derived in this anal- ysis. Each of these decisions influenced the final estimate; in addition, some specific features of the index and factors related to attributable risk in general also had an influence. The net effect of the empirical decisions is diffi- cult to assess, but the first decision-no correction for underreporting and no proration for ill-defined causes-probably dominates and results in a sizable underestimate. The order of magnitude of the under- estimate can be approximated by comparing the esti- mate of total mortality in Latin America derived for this analysis (2,060,OOO [Table 251) with an estimate, derived by using regression methods, that attempted to account for underreporting (3,197,OOO [Hakulinen et al. 19861). Based on this difference in overall mor- tality of about 55 percent, the number of smoking- attributable deaths might be as high as 155,000. The more conservative estimate of 100,000 smoking- attributable deaths was deemed more appropriate be- cause it directly relates to the data with which ministries of health in Latin American and Caribbean countries actually work. In addition, the conservative method allows a simple, uniform decision rule to be used by all countries of the region in making their own computations. Finally, this approach allows for in- creasingly credible estimates of SAM to be made as better mortality data become available and the esti- mates are gradually refined. The index of smoking maturation is based on a comparison of lung cancer rates. Although accurate information is more readily available for lung cancer than for other conditions, it may not be the optimal condition for use in calculating the index. Although tar levels affect the risk for lung cancer, they appar- ently do not affect the risk for cardiovascular disease and COPD (USDHHS 1981). Further, the lag between increased consumption of tobacco and a rise in lung cancer mortality may not be representative of the lag for other diseases. In addition, use of the 55 to 64 age group for calculating the index underestimates the population's exposure to smoking in most Latin American and Caribbean countries because peak tobacco-consumption rates have not yet been reached. Because the index is empirical, there is no clear methodologic justification for the square root transfor- mation. Many transformations are available; the square root was used because of properties appropri- ate to the analysis. Specifically, taking the square root of numbers less than one produces a nonlinear effect: it increases all numbers that are less than one, but it has a greater effect on numbers close to zero than on numbers close to one. Thus, upward revision is pro- portionately greater for countries with low rates than for countries with high rates. This choice modulates, to some extent, the conservative nature of the index. On the other hand, no deaths were attributed to smok- ing in countries with lung cancer rates less than those for U.S. never smokers. Since smoking is not uni- formly distributed in such countries, rates may be higher for some subgroups, and at least some deaths should have been attributed to smoking. Finally, this methodology is weakened by a lack of information on multiple risk factors. The SAF may be higher or lower when risks other than smoking play a significant role in disease causation. Because smok- ing is the dominant risk factor for lung cancer, this effect is probably negligible. In cardiovascular disease, however, smoking interacts with hypertension, hyper- cholesterolemia, physical inactivity, obesity, diabetes, and possibly other risk factors as well, and this effect may be considerable. Thus, the empirical choices and the specifics of the analysis may have differing effects, but the final estimate of 526,000 annual deaths attributable to smoking in the Americas is almost certainly conserva- tive. This estimate-perhaps best viewed as the first point on a continuum of such estimates-provides an order of magnitude for the number of smoking-related deaths in the Americas. If, as suggested in the first half of this chapter, the prevalence of cigarette smoking is increasing in some areas, accurate assessment of SAM is of consid- erable importance. As noted, the lack of some critical data diminishes the precision of the estimates and fosters a greater reliance on empirical decisions. As data systems develop, individual countries will be better able to apply these methods for calculating SAM for their own populations. Table 32. Smoking-attributable mortality* for men and women in the Americas, c. 1985 Region and country Men Latin America Andean Area Colombia Peru Venezuela Southern Cone' Argentina Chile Brazil Central America** Mexico Latin Caribbean Cuba Caribbean North America++ Canada United States All regions of the Americas Women Latin America Andean Area Colombia Peru Venezuela Southern Cone' Argentina Chile Brazil Central America** Mexico Latin Caribbean Cuba Caribbean North America++ Canada United States All regions of the Americas Lung cancer mortality rateS Index of smoking maturity --__ - - .302 .140 .444 - .829 .566 .456 - ,376 - .716 (aged ~65) SAfl " (aged 265) (aged ~65) SAM" -___ SAF SAM SAF SAM - - 34.1 19.5 55.6 - 155.5 80.6 57.8 - 44.3 - 119.8 - 8,426 - 6,432 - 7,090 - 785 - 557 - 462 .136 386 ,063 287 .154 237 .063 24 .029 25 .072 24 ,200 354 .093 228 .226 167 - 2,583 - 2,245 - 2,151 .373 1,983 .174 1,156 .423 1,659 .255 290 .119 344 .288 261 .205 3,411 .096 1,844 .233 3,652 - 71 - 89 - 36 ,169 708 ,079 559 .192 435 - 867 - 1,138 - 355 ,322 711 ,150 974 .365 298 - - - 128 - 108 - 129 - - 209.0 .975 219.0 1.000 - 36,907 - 48,251 - 5,696 .439 3,376 .205 4,044 .497 449 .450 33,526 .210 44,204 .510 5,243 - - 45,460 - 54,791 - 12,914 - - 16.1 7.8 23.7 - 16.6 19.5 15.0 - 16.4 - 42.2 - - ,267 - ,409 - ,279 ,338 ,240 .2; - .632 - - ,710 - ,167 - .114 ,139 .098 - .112 - ,259 1,848 346 198 - 1,837 - 234 ,032 126 - - ,049 108 - 403 ,033 259 .041 119 ,029 505 28 ,033 207 - 459 ,076 405 - - 149 236 162 63 706 20 209 331 299 - ,147 - ,225 - .153 ,186 ,132 - ,151 - ,347 857 101 59 - 42 223 149 58 313 10 113 98 85 - - 75.1 90.1 - - .901 1 .ooo - - - .369 ,410 30 11,315 768 10,547 - 27 - - 28,854 - .108 1,919 .496 .120 26,934 .550 29 5,343 386 4,957 - 13,194 - 30,718 - 6,229 Coronary heart disease Coronary heart disease Cerebro- vascular disease Source: Pan American Health Organization (1990b). "Mortality from defined causes for persons aged `Cancer of the lip, oral cavity, and pharynx. 35 or older, in thousands. tThe lung cancer rate for U.S. never smokers used for the index calculation was 15.5 per 100,000 men aged 5.564 and 10.4 per 100,000 women aged 55-64. 94 Prevalence and Mortality - - ,073 .034 ,107 ,199 ,136 ,109 - ,090 ,172 5,959 - 11,549 - 5,946 - 845 - 5,819 52,066 ,071 418 - 579 - 305 - 36 - 441 3,584 ,033 222 .272 258 .236 164 ,142 17 .254 212 1,784 ,040 26 .126 33 ,109 12 ,066 2 ,118 38 184 .009 143 ,400 263 .346 116 ,209 15 ,373 148 1,434 .063 2,182 - 5,952 - 2,446 - 468 - 1,727 19,754 .124 1,527 .746 4,580 ,647 1,782 .390 368 ,697 916 14,370 ,131 315 .509 492 ,441 260 .266 35 475 553 2,549 .083 2,302 .410 2,522 .356 2,197 .214 191 ,383 1,827 17,945 .075 56 - 75 - 33 - 5 - 67 431 .013 503 .339 938 .293 322 .177 47 .316 1,409 4,920 .037 498 - 1,483 - 645 - 98 - 348 3,432 .086 399 ,644 1,334 ,558 462 ,336 86 .601 252 4,517 ,146 - 198 - 214 - 131 - 18 - 105 1,030 ,062 - 13,098 - 82,569 - 12,781 - 3,503 - 11,892 214,696 .199 .234 1,162 .878 7,249 .761 1,254 .458 367 ,819 1,245 19,147 .211 .240 11,932 ,900 75,310 ,780 11,523 .470 3,135 ,840 10,645 195,519 .198 - 19,255 - 94,331 - 18,859 - 4,366 - 17,817 267,792 ,146 - 857 101 59 - 1,567 210 102 - 673 97 64 - - ,016 - ,025 - .017 .020 ,014 - .016 - .038 - .211 - .323 - .220 .267 .190 - .217 - .499 - ,163 - ,249 - ,170 ,206 .147 - ,167 - .385 - .099 - .151 - ,103 ,125 .089 - ,102 - .234 103 11 7 - 2,257 12,247 .021 289 1,716 .018 151 977 .025 - 42 223 149 58 313 10 113 98 85 108 317 220 87 360 2% 389 352 33 181 116 55 207 10 74 104 89 - 5 30 22 6 30 1 10 20 17 - ,211 - .323 - .220 ,267 ,190 - .217 - .499 - - 138 739 386 2,308 170 1,473 203 727 517 4,156 35 140 827 2,052 203 1,877 167 1,671 - .039 .018 .016 ,029 ,023 ,005 ,018 .036 ,069 - 29 5,343 386 4,957 - - .054 .060 - .712 .790 26 32,706 2,242 30,463 - - .550 ,610 11 3,657 312 3,345 - 6,229 - 34,299 - 4,342 - - .333 ,370 - 3 1,253 105 1,148 - - .712 .790 33 218 ,015 7,170 95,562 ,095 532 6,631 .088 6,638 88,928 ,096 1,359 - 9,460 108,027 .067 Cerebro- vascular disease (aged 265) SAF SAM Lung cancer SAF SAM SAF SAM SAF SAM SAF SAM Oral,+ laryngeal, and esophageal cancer `Smoking-attributable fraction. `iSmoking-attributablemortality. `Includes Falkland Islands. *`Excludes Belize. `+lncludes Bermuda and St. Pierre and Miquelon. Bladder cancer Chronic obstructive pulmonary disease Total SAM Total SAM t~:~~:~l mortality Table 33. Adjusted estimates of smoking-attributable mortality (SAM) in the Americas, c. 1985 - Chronic obstructive Total Region and Total p;;;e;;:+q Other diseases5 country SAM* Cancer4 and causes adjusted SAM Latin America 64,300 18,600 1,400 13,800 98,100 Andean Area 5,300 1,700 10 1,200 Southern Cone/l 8,200 22,100 4,900 700 4,500 32,100 Brazil 22,100 5,400 300 4,600 Central America1 32,400 600 200 10 100 900 Mexico 7,000 5,100 100 2,000 14,200 Latin Caribbean 7,300 1,300 200 1,400 10,200 Caribbean 1,200 300 30 300 1,900 North America 310,300 43,800 12,000 60,000 426,100 United States 284,400 39,800 11,000 55,000 390,200 Other** 25,800 4,100 1,000 5,100 36,000 All regions of the Americas 375,800 62,700 13,400 74,100 526,000 Source: Pan American Health Organization (1990b). Adjustments were based on 1985 estimates for the United States; U.S. Department of Health and Human Services (1989). Percentages used for upward adjustment for chronic obstructive pulmo- nary disease and other diseases and causes were specific to those diagnostic rubrics. Upward adjustment for cancers was based on lung cancer. *Total for men and women from Table 32. +230% adjustment to compensate for undercounting. *10.4% increase added to adjust for omission of cancers of the kidney and pancreas and for underestimates of smoking- attributable fraction for cancers of oral cavity, esophagus, and larynx. 516.4% increase added to adjust for exclusion of cervical cancer, other types of cardiovascular and respiratory diseases, deaths among newborns due to smoking by the mother, lung cancer deaths due to passive smoking, and deaths from smoking-related fires. IlIncludes Falkland Islands. IExcludes Belize. **Includes Bermuda, Canada, and St. Pierre and Miquelon. 96 Prevalence and Mortality Conclusions 1. Certain sociodemographic phenomena-such as change in population structure, increasing urban- ization, increased availability of education, and entry of women into the labor force-have in- creased the susceptibility of the population of Latin America and the Caribbean to smoking. 2. The lack of systematic surveillance information about the prevalence of smoking in most areas of Latin America and the Caribbean hinders com- prehensive control efforts. Available information reflects a variety of survey methods, analytic schemes, and reporting formats. 3. Available data indicate that the median preva- lence of smoking in Latin America and the Carib- bean is 37 percent for men and 20 percent for women. Variation among countries is consider- able, however, and smoking prevalence is 50 per- cent or more in some populations but less than 10 percent in others. In general, prevalence is highest in the urban areas of the more developed coun- tries and is higher among men than among women. 4. The initiation of smoking (as measured by the prevalence of smoking among persons 20 to 24 years of age) exceeds 30 percent in selected urban areas. Although systematic time series are not available, the data suggest that more recent co- horts (especially of women) in the urban areas of more developed countries are adopting tobacco use at a higher rate than did their predecessors. The smoking epidemic in Latin America and the Caribbean is not yet of long duration or high intensity, and the mortality burden imposed by smoking is smaller than that for North America. By 1985, an estimated minimum of 526,000 smoking- attributable deaths were occurring each year in all the countries of the Americas; 100,000 of these deaths occurred in Latin American and the Carib- bean countries. The estimate of 526,000 deaths annually is conser- vative and is best viewed as the first point on a continuum of such estimates. 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Tobacco Alert: 4-5,7, January 1991. 200 Prevalence and Mortality Chapter 4 Economics of Tobacco Consumption in the Americas Preface 103 Economic Costs of the Health Effects of Smoking 105 Latency of the Health Consequences 105 Estimating the Economic Costs 105 General Considerations and Limitations 105 Prevalence- and Incidence-Based Studies 110 Application to Developing Countries 112 Financing of Health Care and Pension/Disability Funds 112 Costs of Smoking-Control Policies and Programs 114 Economics of the Tobacco Industry 214 The Tobacco Sector 114 Overview 114 Demand for Tobacco 115 Advertising 128 Supply of Tobacco 119 Manufacturing 122 Distribution 121 Trade 122 Subsidies to Tobacco Production 122 Contribution of Tobacco to Economic Growth and Development 125 Externalities 125 Price, Production, and Substitution 125 Future of Tobacco Production 127 Tobacco Taxation 127 Subnational Taxes 128 Effects of Excise Taxes on Smoking 129 Modeling Addiction 131 Analysis of Recent Tax Increases 132 Health Consequences of Tax Changes 133 Equity, Incidence, and Distribution of the Tax Burden 134 Use of Tobacco Taxes 135 Conclusions 136 References 137 Preface Although the economic aspects of smoking in North America have been extensively examined, detailed data are not availablefor Latin America and the Caribbean. For the latter region, a definitive analysis of the health costs of smoking and the economic configuration of the tobacco industry await more systematic reporting and collection of data. In the first part of this chapter, a generic approach to assessing the costs associated with the major adverse health effects of smoking is outlined. The background for this approach, which uses concepts introduced in Chapter 3, is described. Data and examples from the United States and Canada are provided, and the work done in these countries is summarized. In the second part, an overview of the tobacco sector of the economy is offered. Again, more data are available from North America than from Latin America and the Caribbean, but the economic issues (supply and demand, advertising, subsidies, taxation, and others) are relevant to all countries of the Americas. This overview provides a framework for weighing the relative costs and benefits of tobacco production and consumption. Economics 703 Economic Costs of the Health Effects of Smoking Latency of the Health Consequences Since 1964, when a report on the health conse- quences of smoking was released by the Surgeon General's Advisory Committee on Smoking and Health (Public Health Service 19641, extensive re- search has assessed the disability, morbidity, and pre- mature mortality attributable to tobacco use. The many effects of smoking on health were documented in the Surgeon General's twenty-fifth anniversary re- port on smoking and health (U.S. Department of Health and Human Services IUSDHHSI 1989). A detailed examination of smoking-attributable mortal- ity (SAM) in the United States summarizes these asso- ciations (Table 1). (See Chapter 3 for an assessment of SAM in Latin American and Caribbean countries.) As an epidemiologic transition occurs in Latin America and the Caribbean, noncommunicable dis- eases are expected to become increasingly prominent as causes of death. For example, although Brazil bears a burden from certain infectious diseases (such as Chagas' disease) and the growing incidence of human immunodeficiency virus infection, many other infec- tious and parasitic diseases have been brought under control. Many cases of lung cancer are now antici- pated in Brazil (The World Bank 1989a). Cardiovas- cular disease is the leading cause of death in Brazil (The World Bank 1989a), and the number of deaths due to cardiovascular disease is likely to increase sig- nificantly. Among Latin American women, for whom prevalence of smoking appears to have increased (see Chapter 3), an increased incidence of lung cancer may soon become apparent (Crofton 1990). Numerous studies have reported a 20- to 30-year latent period between the initiation of smoking on a regular basis and the development of lung cancer (USDHHS 1982), a phenomenon well documented in North America. In the United States, many men started to smoke as adolescents or young adults around World War I, and many women started as adolescents or young adults during or after World War II. The incidence of lung cancer in the United States began to increase for men around 1940 and for women around 1960 (USDHHS 1989). A similar lag occurred in Canada; from 1976 to 1986, the rate of lung cancer doubled (Millar 1988). An epidemiologic and economic result of latency is the continued rise in lung cancer deaths despite a decline in the prevalence of smoking. In the United States, the lung cancer mortal- ity rate for men did not begin to level off until 1985 (USDHHS 1989). For women, deaths from lung can- cer have not yet peaked, and lung cancer has become the most common cause of cancer mortality, surpass- ing breast cancer (USDHHS 1989). The correlation between the level of cigarette consumption in a population cohort when it enters adulthood and the lung cancer rate for that cohort when it enters middle age provides further evidence of the 20- to 30-year latency (Figure 1). In Brazil, lung cancer mortality among adult males has increased as a lagged response to the increase in tobacco consump- tion (Figure 2) that began during World War II. Thus, the consequences of tobacco consumption-including economic consequences-are long in developing, and the full impact of disease, disability, and death is measured over decades. Estimating the Economic Costs Many estimates have been made of the costs of smoking in the United States and Canada. A similar body of work is not available for Latin America and the Caribbean-in part because the data required for such analyses are often not available. In addition, a single estimate would probably not serve adequately because of the heterogeneity among countries of the region. An approach to estimating the health costs of smoking is described below, along with some esti- mates that have been made. General Considerations and Limitations Estimates of the economic effects of the health consequences of smoking generally consist of three components (U.S. Office of Technology Assessment [USOTAI 1985): o An attempt to identify an increased incidence of smoking-related illness in current or former smok- ers and attribution of that increase to smoking. o An application of these attribution ratios to esti- mates of the direct (health care) costs of caring for persons with smoking-related illness-to obtain an estimate of the direct costs of smoking. o An estimate of the indirect costs of smoking- related illness, which is made by measuring the increased rate of morbidity and mortality in current and former smokers and then valuing (1) time lost due to morbidity by their current wage rate and (2) excess mortality by discounted future earnings. Economics 105 Table 1. Relative risks* (RR) for death attributed to smoking and smoking-attributable mortality (SAM) for current and former smokers, by disease category and sex, United States. 1988 Men RR ~-_____- Disease category (ICD-9-CM)+ Current Former smokers smokers SAM Adult diseases (235 years of age) Neoplasms Lip, oral cavity, pharynx (140-149) 27.5 Esophagus (150) 7.6 Pancreas (157) 2.1 Larynx (161) 10.5 Trachea, lung, bronchus (162) 22.4 Cervix uteri (180) NA Urinary bladder (188) 2.9 Kidney, other urinary (189) 3.0 Cardiovascular diseases Hypertension (401404) 1.9 Ischemic heart disease (410-414) Persons aged 35-64 years 2.8 Persons aged 265 years 1.6 Other heart diseases (390-398, 415-417,42&429) 1.9 Cerebrovascular disease (43&438) Persons aged 35-64 years 3.7 Persons aged 165 years 1.9 Atherosclerosis (440) 4.1 Aortic aneurysm (441) 4.1 Other arterial disease (442448) 4.1 Respiratory diseases Pneumonia, influenza (480-487) 2.0 Bronchitis, emphysema (491-492) 9.7 Chronic airways obstruction (496) 9.7 Other respiratory diseases (Olcl-012,493) 2.0 Pediatric diseases (~1 year of age) Short gestation, low birthweight (765) Respiratory distress syndrome (769) Other respiratory conditions of newborn (770) Sudden infant death syndrome (798) Burn death& Passive smoking deaths5 Total Source: Centers for Disease Control (1991). *Relative to never smokers. 8.8 4,942 5.6 2.9 1,460 6,402 5.8 5,478 10.3 3.2 1,609 7,087 1.1 2,775 2.3 1.8 3,345 6,120 5.2 2,401 17.8 11.9 589 2,990 9.4 78,932 11.9 4.7 33,053 111,985 NA 0 2.1 1.9 1,246 1,246 1.9 2,951 2.6 1.9 963 3,914 2.0 2,729 1.4 1.2 363 3,092 1.3 3,441 1.7 1.2 2,254 5,695 1.8 29,263 3.0 1.4 9,105 38,368 1.3 41,821 1.6 1.3 27,990 69.811 1.3 27,503 1.7 1.2 14,638 42,141 1.4 5,121 4.8 1.4 4,504 9,625 1.3 11,554 1.5 1.0 5,134 16,688 2.3 4,644 3.0 1.3 3,612 8,256 2.3 5,798 3.0 1.3 1,435 7,233 2.3 1,874 3.0 1.3 1,111 2,985 1.6 11,580 8.8 9,670 8.8 29,838 1.6 828 2.2 10.5 10.5 2.2 1.4 8,098 19,678 7.0 5,269 14,939 7.0 16,884 46,722 1.4 690 1,518 1.8 344 1.8 261 605 1.8 351 1.8 233 584 1.8 1.5 384 422 850 1,330 286,824 1.8 1.5 277 661 280 702 453 1,303 2,495 3,825 147,351 434,175 Women _____~-~~ RR Current Former smokers smokers SAM Total SAM Tlnternational Classijication of Diseases, Nirlfh Revision, Clirzicnl Modificofiolr `Data from the Federal Emergency Management Agency, 1990. $Deaths among nonsmokers from'lung cancer attributable to passive smoking; hational Research Council (1986). 106 Economics Several estimates have been made for the United with regard to the medical conditions attributed to States (Rice et al. 1986; Hodgson 19881, Canada (Col- smoking. Some studies include lung cancer only, lishaw and Myers 1984; Forbes and Thompson 1983a), while others include heart disease and chronic ob- the United Kingdom (Atkinson 1974), Sweden (Hjalte structive pulmonary disease (COPD). Other studies 19841, and Switzerland (Leu and Schaub 1984). Vari- compare differences in the overall use of health care ous factors should be included in a complete picture by smokers and nonsmokers. However, these esti- of the economic impact of smoking-related illness mates do not include nonmedical components of di- (Table 2), but few published studies have addressed rect costs, such as the costs of transportation to health all of these factors, and most studies have concen- care providers or of modifying an environment to trated on factors for which data are available. accommodate a person with a severe chronic illness. Most estimates of the costs of smoking-related illness calculate the direct costs of treating persons with smoking-related diseases, including the costs of hospital and nursing-home care, physicians` fees, and medications (Table 3). The specific items included in the estimates vary among studies, which also differ Estimates of the indirect costs of smoking-related illness attempt to measure the productivity lost or output forgone as a result of smoking-related illness or death (Table 4). This so-called human capital ap- proach has been criticized for placing a high value on losses sustained by young adults, men, and more- Figure 1. Correlation between cigarette consumption per person who entered adult life in 1950 and lung cancer rate for that generation as it entered middle age in mid-1970 100 - + United States so- Source: Doll and Pete (1981). Number of manufactured cigarettes consumed f Rate based on over 100 deaths. O Rate based on 25-100 deaths. 0 U.S. nonsmokers 1959-1972. Economics 107 Figure 2. Per capita rate of cigarette consumption in Brazil and lung cancer deaths for men in Rio Grande do Sul, Brazil t-- / 7 / \ / \ / \ / 14 /' / \ / / \ / \ / b-- d' / / / / / /* / / S-to 30-year lag d 1 , I I I I 1940 1950 1960 Source: The World Bank (1989a). educated persons (Markandya and Pearce 1989). In addition, earnings lost because of illness and mortality may have little relationship to the value people place on their life or health (Markandya and Pearce 1989). A more appropriate measure of that value may be the amount they are willing to pay to reduce the probabil- ity of death or disease. Although several attempts have been made to estimate willingness-to-pay for non-smoking-related illness (Viscusi 19901, this ap- proach has not been applied to cost-of-smoking stud- ies. In addition, no value has been assigned to intangible items, such as pain and suffering, prema- ture death, and loss experienced by relatives; accord- ingly, these intangibles have not been included in any published estimates of the costs of smoking. Some estimates include costs associated with the harmful effects on the fetus and on newborns of maternal smoking during pregnancy and of postnatal exposure to environmental tobacco smoke (Forbes and Thomp- son 1983b); however, most published estimates do not incorporate measures of external costs (those borne by persons other than smokers). The transfer payments (pension benefits and sick benefits) associated with smoking-related illness have / I, 30 20 10 0 1970 1980 been a source of confusion and controversy. Transfer payments reflect who pays for and who benefits from smoking-related illness; these transfers are not, strictly speaking, economic costs because they do not reflect resources consumed or lost due to smoking. How- ever, discussions of smoking-control policies have fre- quently asked whether smokers in economically advanced societies (with well-developed public or pri- vate health care financing, disability, and pension sys- tems) cover the costs of their own illness (Manning et al. 1989; Schelling 1986; Garner 1977). Accurate estimation of the cost of smoking is influenced by the quality of data available, current demographic circumstances, and competing mortality risks. Cost estimates require reliable data on smoking behavior, the incidence of smoking-related illnesses, and the prevalence of such illnesses at death. In many developing countries, vita1 statistics are unreliable or incomplete (see Chapter 3, "Smoking-Attributable Mortality in Latin America and the Caribbean"), al- though several Latin American and Caribbean coun- tries have well-established national statistical registries (World Health Organization [WHO] 1989) from which reliable estimates can be constructed. 108 Economics Table 2. Components of the costs of the health effects of smoking - Component Definition Direct costs Medical care Costs of treatment for smoking-related illness. Other Nonmedical costs of smoking-related illness. Indirect costs Morbidity costs Mortality costs Loss of earnings and/or housekeeping services due to smoking-related illness. Loss of earnings and/or housekeeping services due to premature death from smoking-related illness. Intangible costs Pain and suffering Premature death Relatives' loss Cost to individual of pain and suffering from smoking-related illness. Cost to individual of premature death due to smoking. Cost to smoker's relatives and friends because of concern for smoker's health, observation of sickness and suffering, and grief and suffering due to smoker's premature death. Transfer payments Taxes Pension benefits Sick benefits Reduced taxes paid by smokers due to illness-related reductions in earnings. Value of transfer payments such as pensions paid or forgone due to premature death. Health care costs paid by public or private insurance plans. Sick pay and disability benefits paid to smokers during illness. External costs Effects of smoking on nonsmokers, including deleterious health effects and the annoyance of exposure to environmental tobacco smoke. Includes the deleterious effects of maternal smoking on the fetus, on infants, and on children. A country's demographic configuration influ- ences the degree to which smoking-related illness be- comes manifest. Since many smoking-related illnesses do not have an important impact on persons under age 50, such illnesses do not significantly con- tribute to mortality in countries where life expectancy after infancy is low; however, low life expectancy affects only a small proportion of the population in Latin America and the Caribbean (Chapter 3, "Life Expectancy and Mortality"). The manifestation of smoking-related illness is also a function of competing morbidity and mortality. Latin American and Caribbean countries are at differ- ent stages of epidemiologic transition, and the chronic conditions associated with smoking may be obscured by the continued presence of infectious diseases and other disorders. Countries also vary in the extent to which background conditions (nutritional, genetic, or environmental) interact with smoking. Another limitation of cost-of-smoking studies is the method used to calculate attributable risk (AR).' Although quite useful, this calculation must be ap- plied judiciously; it attributes all differences between ever smokers and never smokers to smoking, and it may overestimate the level of smoking-related illness. Smokers and never smokers differ in several charac- teristics, including diet and level of alcohol consump- tion, exercise, and education KJSDHHS 1990), all of which may be associated with differences in health outcomes. Leu and Schaub (1983) developed the hy- pothetical construct of the "nonsmoking smoker- type," a person who is like a smoker in all ways except smoking, to serve as the standard of comparison in estimating costs of smoking. This construct was also used by Manning and associates (1989) to calculate the lifetime external costs of smoking in the United States. However, the concept may not be useful in many developing countries because of the variability of competing factors in different settings. In attempting to estimate tobacco-related dis- eases in developing countries, some researchers have used a single measure of AR for each of the major smoking-related illnesses, such as lung cancer, heart A detailed discussion of the theory, limitations, and other methodologic issues concerning the calculation of AR and smoking-attributable disease and mortality is presented in the Surgeon General's 1989 report KJSDHHS 1989). Economics 109 Table 3. Medical care costs for smokers, by study type and author Year of Study type and author Country estimate Annual costs (prevalence-based estimates) Collishaw and Myers (1984)+ Canada 1979 Lute and Schweitzer (1978) United States 1976 Rice et al. (1986) United States 1984 Stoddart et al. (19861t5 Canada (Ontario) 1978 Thompson and Forbes (1983)+ Canada 1980 U.S. Office of Technology Assessment (1985) United States 1985 Lifetime costs (incidence-based estimates) Manning et al. (1989)" United States 1983 Oster, Cold&, Kelly (1984) United States 1980 Total cost (billions)* 1.64 52.02 24.85 0.34 3.04 12-35 cost per smoker* 164 868 444$ 127 302 214-870 6,113 2,474-6,576: 1,147-4,138 Hodgson (1990) United States 1985 501 .o 6,239++ Hjalte (1984)+ Sweden 1980 0.18 73 *Converted to 1985 U.S. dollars by using U.S. Bureau of the Census (1988) Table 738 consumer price index. +Markandya and Pearce (1989) report these estimates converted to 1980 U.S. dollars. STotal cost divided by 56 million smokers in the United States in 1985; U.S. Department of Health and Human Services (1989). %ublic expenditure only. 110.33 cost per pack x 16,300 packs = $5,379 (1983 U.S. dollars). _Men aged 4044 light (l-14 cigarettes per day) to heavy (235 cigarettes per day) smokers. "Women aged 4&44 light (l-14 cigarettes pe; day) to heavy (235 cigarettes per day) smokers. `+Lifetime cost for all smokers >25 years old. disease, and COPD (90,26, and 75 percent, respectively) (Pan American Health Organization [PAHOI 1989). Such use of AR can be misleading because the propor- tion of current and former smokers varies across countries and over time, and the relative risk is a function of smoking patterns (e.g., the number of cigarettes smoked daily and the duration of smoking), which also vary (USDHHS 1989). For example, Joly and colleagues (1983) reported that of all lung cancers for Cuba in 1984, 63 percent among women and 91 percent among men were caused by smoking; for U.S. women and men in the mid-1980s, the attribution proportions were 75 and 80 percent, respectively (Centers for Disease Control [CDC] 1987). Moreover, the relative risk for smoking is also determined by nontobacco causes of illness, and these differ among countries. Applying an exogenously determined set of AR proportions to any country's population may lead to unreliable estimates of the level and costs of smoking-related illness. However, for countries that lack endogenous data, this procedure is often the only alternative (see Chapter 3, "Smoking-Attributable Mortality in Latin America and the Caribbean"). Prevalence- and Incidence-Based Studies The prevalence-based approach to measuring the economic costs of tobacco-related disease has fre- quently been used, largely because of its relatively simple methodology, the availability of the data needed for the calculations, and the consistency of carefully made estimates (Rice et al. 1986) (Table 3). Several of these prevalence-based studies (Lute and Schweitzer 1978; USOTA 1985; Rice et al. 1986; Collishaw and Myers 1984) indicate that the costs of smoking in any one year are likely to be great and that the economic costs of smoking should be taken 110 Economics Table 4. Value of productivity lost due to mortality and morbidity, by study type and author _____ ___~~ .__ Mortality Morbidity Year of Total cost Cost er Total cost Cost er Study type and author Country estimate (billions) l! smo er (billions) K smo er Annual costs (prevalence-based estimates) Collishaw and Myers (1984) Canada U.S. Office of Technology Assessment (1985) United States Rice et al. (1986) United States Lifetime costs (incidence-based estimates) 1979 4.04 405 0.75 74 1985 27-61 484-1,080*+ 1984 9.63 172t 21.74 388t Leu and Schaub_ (1984) Switzerland Oster, Colditz, Kelly (1984) United States 1976 0.28-0.35 149-183 0.14-0.25 76-132 1980 24,221-68,316+" 5,894-21,765+' *Total cost divided by 56 million smokers in the United States in 1985; U.S. Department of Health and Human Services (1989). `Range includes both mortality and morbiditv losses. *Converted to 1985 U.S. dollars by using U.S.`Bureau of the Census (1988) Table 738 consumer price index. _Markandya and Pearce (1989) report these estimates converted to 1980 U.S. dollars. "Men aged 40-44 light (l-14 cigarettes per day) to heavy (235 cigarettes per day) smokers. _Women aged 40-44 light (l-14 cigarettes per day) to heavy (235 cigarettes per day) smokers. seriously. These studies estimate expenditures for medical care for tobacco-related diseases, workdays lost, and future productivity lost due to smoking- related deaths during the year. However, these stud- ies do not address other issues that most concern policymakers, including the economic impact of de- creased prevalence of cigarette smoking, the length of time before economic effects are realized, the eco- nomic benefits of not smoking, and a comparison of the lifetime illness costs of smokers with those of nonsmokers (Hodgson 1990). Health care expendi- tures tend to increase just before death, but smoking shortens life expectancy and changes the pattern of health care expenditures. The question arises whether the health care costs incurred by smokers, when ad- justed for the altered temporal pattern, exceed costs incurred by never smokers. Most cost-of-illness studies are based on esti- mates of the prevalence of illness in a particular year. Because many smoking-related illnesses are chronic and the latent period between initiation of smoking and onset of illness is long, prevalence-based cost estimates reflect the consequences of historical trends in smoking, which may differ among countries at different times. Accordingly, prevalence-based cost estimates cannot be used to predict the impact of smoking-control policies or to predict the impact of increases in smoking, except after long periods. For policymakers, incidence-based, or lifetime, estimates of the costs of smoking-related illness may be more useful than prevalence-based estimates (Leu and Schaub 1983; Manning et al. 1989; Oster, Colditz, Kelly 1984). In the incidence-based model, the eco- nomic costs of smoking are estimated as the average additional costs per smoker, due to smoking-related illnesses, incurred over the smoker's lifetime. Esti- mates can be made of direct (medical care expendi- tures) and indirect (e.g., lost wages, salaries, and housekeeping services) costs of smoking and of the benefits of quitting. For lung cancer, coronary heart disease, and emphysema, the discounted value of an- ticipated lifetime costs has been estimated for smoking- related diseases in persons who smoked in 1980 and continued to smoke (Oster, Colditz, Kelly 1984). The costs of the benefits of quitting can be estimated as the difference between the cost-of-smoking estimate and the expected costs of former smokers, which reflect the gradual rate of decline in risk for smoking-related diseases. Estimates of each smoker's lifetime cost of smok- ing differ by the person's age, sex, and quantity smoked (Oster, Colditz, Kelly 1984). For example, the lifetime costs of smoking for a 45-year-old man who is a heavy smoker are significantly greater than those of a 65-year-old woman who is a light smoker ($46,334 vs. $2,462; in 1980 U.S. dollars). Oster and colleagues suggest that estimates of the costs of the benefits of quitting are less than the costs of smoking and that benefits vary according to the characteristics of indi- vidual smokers. The expected costs of both smoking and the benefits of quitting were sizable for all groups of smokers foster, Colditz, Kelly 1984). Recently, Hodgson (1990) analyzed data on use and costs of medical care and on mortality for specific age groups in cross sections of the U.S. population to generate profiles of lifetime health care costs begin- ning at age 17. Because expenditures are higher for persons who die than for those who survive, the anal- ysis distinguished between the two groups within a given age range. The profiles, estimated for men and women by age and amount smoked, include the costs of inpatient hospital care, physician services, and nursing-home care. However, the cost of drugs and dental care, as well as morbidity and mortality costs, are excluded. Hodgson concluded that, despite the higher death rate for smokers, the cumulative impact of the excess medical care used by smokers while alive outweighs their shorter life span and that smokers incur higher medical care costs during their lifetime. For all smokers, excess medical care costs increase with the amount smoked. Hodgson (1990) estimated that the U.S. population of civilian, noninstitutional- ized persons aged 25 years or older who ever smoked cigarettes will incur lifetime excess medical care costs of $501 billion (1990 U.S. dollars discounted at 3 per- cent) or $6,239 per current or previous smoker (Table 3). This excess is a weighted average of the costs incurred by all smokers, whether or not they develop smoking-related illness. For smokers who do develop such illnesses, the personal financial impact is much higher. Lifetime or incidence-based cost-of-illness esti- mates are preferred over prevalence-based estimates for measuring the costs of changes in, and trends affecting, the incidence of disease. However, lifetime cost estimates require knowledge of the natural his- tory of disease, the pattern of medical care use, and the occurrence of co-morbidity. Lifetime costs are often estimated from current profiles for cross sections of populations at different ages and at different stages of disease. To measure the potential impact of changes in public policies and demographics on future health care costs, projections of cost estimates must be made. Changes in parameters, such as technologic change and its rate of diffusion, must be considered, or esti- mates may be biased and misleading (Hodgson 1988). The incidence-based approach is better suited than the prevalence-based approach for estimating the costs of smoking because the former relates current changes in smoking behavior to future changes in the costs of smoking-related illness. The incidence-based approach, however, suffers from the limitations of transferability between countries (mentioned above); it does not directly address intangible costs and externalities; and it values mortality and morbidity by measuring forgone earnings rather than willingness- to-pay. Moreover, even for economically advanced countries, including the United States, the incidence- based approach is limited by the lack of adequate and comprehensive data; for less-developed countries, this limitation may be exacerbated. Application to Developing Countries The cost-of-illness studies conducted in the United States and other developed countries reflect health care rendered in technologically sophisticated, expensive health care systems. In many other parts of the world, health care delivery systems are less tech- nologically advanced, and access to sophisticated therapy is frequently limited to residents of large met- ropolitan areas. Thus, the costs and benefits of health care services in one area may differ significantly from those found in other areas. Using the experience of North American and European countries to predict trends in health care for much of the rest of the world is speculative because both the future development of medical technology and the rate of its transference across national boundaries are largely unknown. Few estimates are available on the costs of smoking- related illness in Latin American and Caribbean coun- tries. In one report, an average of 19,000 deaths were attributable to smoking-related diseases in Venezuela during 1980 to 1984 (PAHO 1992). The costs of medi- cal care and employee absenteeism associated with smoking-related illness in Venezuela increased signif- icantly from 1978 to 1985 (from US$69 million to US$llO million). Because of the wide variation among countries in demographic structure, morbidity and mortality, health care systems, and prevalence of smoking, these results cannot be generalized to all of Latin America and the Caribbean. Financing of Health Care and Pension/ Disability Funds Considerable attention has been focused on not only the size of the economic burden of smoking-related illness but also on how societies will bear that burden. Miscalculations of economic burden have been de- rived by dividing prevalence-based estimates of the costs of smoking-related illness by the quantity of 112 Economics cigarettes sold. The resultant quotient has been re- ported as the per cigarette cost of smoking borne by society. For example, in the United States, $2.17 is frequently quoted as the cost of smoking per pack of 20 cigarettes (USOTA 1985). This overall cost fails to distinguish between the costs of smoking borne by smokers (internal costs) and those borne by others (external costs). The discussion of taxation (later in this chapter) explains how the magnitude of the bur- den imposed on nonsmokers by smokers is as much a function of the institutional arrangements for financ- ing health care, sick pay, disability, and retirement pensions as it is of the costs of smoking-related illness. Therefore, the incidence of the health costs of smoking varies among countries depending on the structure and scope of each country's social insurance system. Different national systems finance health care, disability, and retirement within the Americas. In some countries, participation in benefit programs is financed by payroll taxes or job-related insurance pre- miums. These types of programs are limited to per- sons who participate in the formal economy. Although national health insurance systems are man- dated in some countries, a Iow level of funding may limit the scope of public systems and lead to the cre- ation of private markets for health services. Informa- tion on the formal health care system may be inadequate for measuring the external costs of smok- ing-related illness; data may be needed on the actual source and disposition of funds. The U.S. health care system is financed by vari- ous government and private payment sources. In the United States in 1985, direct payments accounted for 24 percent and private insurance-principally pro- vided by businesses for their employees-ac- counted for 33 percent of the total personal health care expenditures. The federal government paid for 30 percent, mostly through Medicare (a federal program for disabled persons and persons aged 65 or older) and Medicaid (a program that provides health care for the poor). State and local governments paid for 11 percent of health care expenditures, largely through contribu- tions to the Medicaid program. Government health programs are financed by various mechanisms, in- cluding a payroll tax. The cost of employer-financed health insurance is included in total payroll costs and is reflected in prices; profits, and wage rates. Public old-age pensions and disability payments are financed through the federal Social Security Administration for most persons in the work force, but private plans account for a substantial proportion of benefits (Lazenby and Letsch 1990). In Canada, health care is financed through a national system separately administered by each province, with some direction and funding from the federal government. The Canadian government finances a comprehensive set of medical benefits and restricts funding by private sources, but Canadian citizens can select their own health care providers. Physicians' fees and hospital budgets are negotiated by the government, and savings are achieved in part through the administrative simplicity of the insurance plans. In 1987, Canada spent US$1,483 per person for personal health services, and the United States spent US$2,031 (Igelhart 1989). In 1987, personal health ser- vices accounted for 8.6 percent of the total gross do- mestic product (GDP) in Canada and 11.2 percent in the United States (Igelhart 1989). These comparisons suggest that, on a per capita basis, Canada spends less on smoking-related illness than the United States does. Brazil has a mixed public and private system for financing health care but is moving toward a new constitutionally mandated, unified, and decentralized health system (The World Bank 1989a). Brazil spends approximately 5 to 6 percent of its total GDP on health care, an amount divided almost equally between the private and public sectors. About half of all public financing for health care is channeled through the National Institute for Medical Assistance and Social Security and is tied to employment (The World Bank 1989a). Health services, primarily basic services for the urban and rural poor, are funded by the Ministry of Health through the general budget. State and local governments, which also finance health care, ac- counted for 27 percent of public expenditures on health in 1986. Private health care is financed by indi- vidual persons, who directly pay fees for services, and private insurance, largely financed by employers, which features various capitation and reimbursement- for-expenditures insurance plans. In a recent survey of the Brazilian health care system, The World Bank concluded that "resources have been poorly allocated; little is spent on prevention and much on curative care (70 percent on hospitals alone); little is spent on the poor, and much on the middle class" (The World Bank 1989a, p. 44). In Venezuela, as in Brazil, access to health care is constitutionally guaranteed, but care is delivered both privately and through various government programs (Morgado 1989). The Ministry of Health is responsible for providing health care, and approximately two- thirds of the country's physicians are employed by the Ministry in some capacity. In addition, largely unreg- ulated private insurance reimburses both physicians and private hospitals on a fee-for-service basis. The physician-to-population ratio is high; however, as in other Latin American countries, physicians are con- centrated in the large urban centers. Ecolromics 113 The costs of smoking-related diseases may be substantial in Brazil, Venezuela, and other countries of the Americas with similar health care systems. The concentration of health care resources for curative care (mainly hospital and fee-for-service physicians' care) in urban, middle- and upper-class areas suggests that these groups consume a disproportionate share of the resources and that smoking-related diseases in these groups are treated aggressively. Smoking-related dis- eases may also be a more important source of illness in urban, high-income groups than in low-income groups because persons of high income are likely to have a longer, more intense exposure to tobacco use and a longer life span during which smoking- associated diseases may become manifest. Costs of Smoking-Control Policies and Programs Knowledge of the dangers of tobacco use and concern for public health have led to the development of smoking-control policies in several countries. (See Chapter 6 for a discussion of control efforts.) Many of these policies-such as restrictions on advertising, warning labels on tobacco packages and in advertise- ments, restrictions on smoking in public places, and increases in tobacco taxes-use few direct resources, but hidden or intangible costs may be associated with such policies. However, other smoking-control policies-such as public and school education pro- grams, lobbying efforts of smoking-control advocates, and enforcement of restrictions on cigarette sales, ad- vertising, and smoking in public places-use re- sources that can be considered part of the costs of smoking. The 1989 report of the Surgeon General presents a detailed analysis of smoking-control activities in the United States (USDHHS 1989). Such activities have Economics of the Tobacco Industry recently increased significantly in Canada, where the federa& provincial, and municipal governments have moved to increase tobacco taxes, restrict tobacco ad- vertising, strengthen product warnings, restrict smok- ing ir public places, and help tobacco growers diversify and produce other crops (Collishaw, Kaiser- man, Rogers 19901. Except for the program to dis- courage tobacco cultivation, these policies and programs use few direct resources. These programs reflect, in part, the health advocacy of more than 30 voluntary agencies working individually and collec- tively (as the Canadian Council on Smoking and Health). Such advocacy activities, although rarely costed-out, consume resources that should be in- cluded in estimates of the costs of smoking-control activities. Through the initiative of local medical leaders and health and education authorities, Brazil's first antismoking campaign began in Port0 Alegre in 1976 (The World Bank 1989a), spread to other regions, and gained support. In 1985, the Ministry of Health began to develop a national program to control smoking. A recent evaluation by The World Bank (1989al cited the Brazilian program as a success, although the effects of the program on smoking patterns have not been for- mally assessed. Health planners from The World Bank found that "public information and personal smoking-cessation services," which cost only 0.2 to 2 percent of per capita gross national product (GNP) for each year of life gained, were the most cost-effective of the preventive and therapeutic interventions re- viewed. In contrast, treatment for lung cancer cost 200 percent of per capita GNP per year of life gained. This comparison suggests that public information pro- grams designed to control smoking in Brazil are ex- tremely cost-effective. The Tobacco Sector Overview From an economic perspective, the existence of a market for tobacco indicates that tobacco produces some economic benefits, including (1) consumer satis- faction from smoking and other forms of tobacco use and (2) income to producers in excess of the cost of resources for tobacco production. Tobacco produc- tion also generates costs-principally the value of re- sources used to manufacture tobacco products. Confusion about the costs and benefits of tobacco pro- duction has been spawned by tobacco industry ana- lysts who label the value of the land, labor, and capital used in tobacco production as a benefit of such pro- duction (Tobacco Growers' Information Committee, nd.; 114 Economics Agro-economic Services Ltd. and Tabacosmos Ltd. 1987). In fact, because the resources used in tobacco production are not being used for other products, the cost of these resources is the true resource cost of tobacco production. The value of the alternative goods that could be produced with the resources allo- cated to tobacco production is a measure of the oppor- tunity costs of producing tobacco. A tobacco industry may also generate tax revenues, which are neither benefits nor costs to a society. Rather, taxes are trans- fers of resource claims from one segment of society to the government for redeployment. Subsidies, such as agricultural support programs, are also transfer payments. The cultivation of tobacco is prima facie evi- dence of tobacco's net contribution to growers' in- comes. Although tobacco production may be very profitable for the individual producer, it is not neces- sarily beneficial economically. Subsidies and exter- nalities associated with the production of tobacco may lead to a divergence between what is best for produc- ers and what is best for society as a whole. Demand for Tobacco Worldwide consumer demand for tobacco prod- ucts drives the market for tobacco. In the economist's view, this demand originates from consumer efforts to satisfy exogenously determined wants, which are sub- ject to constraints on consumer resources. Such con- straints include limits on time and disposable income. By using information about products and prices, each consumer purchases a mix of goods to maximize con- sumer satisfaction. One of tobacco's benefits is the avoidance of nicotine withdrawal symptoms by addicted smokers. This benefit and other pleasurable sensations, called "utility" by economists, may have many components, including status, enjoyment, relaxation, a sense of se- curity, affihation with other smokers, and perhaps in certain cultures, a sense of being modern or progres- sive. However difficult these attributes are to mea- sure, economists posit that when consumers choose to spend some of their own limited resources on tobacco, they reveal their preference for purchasing tobacco than for engaging in other forms of consumption or savings. Price is a measure of the amount of alternative goods forgone to purchase tobacco products. (The effects of variation in cigarette price on tobacco con- sumption are discussed later in this section.) Tobacco products, as well as most consumer goods, tend to obey the law of downward sloping demand-as price falls (rises), quantity demanded increases (decreases). Factors that increase the retail price of cigarettes, in- cluding taxes, tariffs, and import quotas decrease con- sumption. The cost of raw tobacco is generally not an important factor in the retail price of tobacco products. In addition, although the supply of cigarettes does not affect demand directly, supply influences consump- tion through the market price: as supply increases, price tends to decrease, which stimulates consump- tion until the additional sales clear the market. Factors other than price that influence the demand for ciga- rettes and other tobacco products are cited in Figure 3. Income determines a consumer's command over resources and limits consumption options. In general, the consumption of most goods increases as income increases, but at a decreasing rate as consumers reach satiety for a particular good. The income elasticity of demand is defined as the percent change in the quan- tity demanded divided by the percent change in in- come that caused the demand change. The relation of consumption to income can be observed for individu- als, groups, and countries, for which income and con- sumption fluctuate over time, and for variations in income and consumption among groups at a particu- lar time. For countries in the Americas, the correlation is positive between per capita cigarette consumption and per capita GNP (Figure 4 and Table 5). This relation is stronger in less-developed countries in Figure 3. Factors, other than price, that affect the demand for tobacco products Reducing Factors Restrictions on sales to minors Restrictions on places for smoking Public education on harmful effects of tobacco use Health warnings on packaging and in advertising I Perception of harm from tobacco use 1 Demand t Augmenting Factors Disposable income of smokers and potential smokers Smokers preference for attributes of tobacco products Advertising and promotion Addiction to nicotine Economics 115 Figure 4. Per capita cigarette consumption and annual per capita gross national producF (GNP) in 24 countries of the Americwt 1985 r . . O ? o ? ? ? 0 2poO 4poO 6poO ~Poo 10,000 12,000 14poO 16JXKl 18,000 20,tUbO Per capita GNP *Using a model that compares the annual per capita consumption of cigarettes to the log of the GNP, the n$ationship is expressed by the following linear regression equation: Consumption = -3241+ 616 ln(GNP per capita) (I? = 68). This equation was used to calculate the elasticities discussed in the text. `See Table 5. which rising incomes frequently lead to increased cigarette consumption due to an increase in the per- centage of the population that smokes and in the amount each smoker smokes and to a shift from homemade and roll-your-own cigarettes to more- expensive, factory-made, higher-quality tobacco products. Several studies indicate that income elasticity measured for multiple countries is higher than that measured for a single country (Table 6). The estimates reported by Chapman and Richardson (1990) and Townsend (1990), and the estimate based on the data in Figure 4, cluster around 0.50 (0.45 to 0.55). How- ever, elasticity tends to fall as income rises, and near- zero estimates have been reported for developed countries (Table 6). In the model that compared consumption to the logarithm of GNP (Figure 41, esti- mated income elasticity of demand is approximately 2.0 at the lower end of GNP but falls to almost zero (0.04) at the upper end. Restrictions on cigarette sales or on where smok- ing is permitted make smoking more difficult. These restrictions raise the total effective price of cigarettes for consumers and reduce cigarette consumption. In- creased perception of the harm of cigarette smoking also depresses demand by increasing the total price of cigarettes (including health-associated costs) or by affecting taste. Physical characteristics of cigarettes, such as fil- ters, and aspects of taste, which include strength, flavor, and smoothness, augment demand. In many countries, the modern tobacco industry developed 116 Economics Table 5. Per capita* cigarette consumption and income in the Americas Per capita cigarette GNP+ per capita Change in Average annual growth in consumption KJS$) consumption (%) GNP (%I Country (1985) (1987) (1970-1985) (1965-1987$ North America United States 3,370 18,530 -15 1.5 Canada 2,392 15,160 -30 2.7 Latin America Argentina 1,780 2,390 3 0.1 Bolivia 330 580 10 -0.5 Brazil 1,700 2,020 30 4.1 Chile 1,000 1,310 -7 0.2 Colombia 1,920 1,240 15 2.7 Costa Rica 1,340 1,610 -20 1.5 Cuba 3,920 -2 Dominican Republic 930 730 -11 2.3 Ecuador 880 1,040 26 3.2 El Salvador 750 860 -21 -0.4 Guatemala 550 950 -26 1.2 Haiti 240 360 -55 0.5 Honduras 1,010 810 7 0.7 Mexico 1,109 1,830 2.5 Nicaragua 1,380 830 10 -2.5 Panama 894 2,240 2.4 Paraguay 1,000 990 4 3.4 Peru 350 1,470 -10 0.2 Uruguay 1,760 2,190 14 1.4 Venezuela 1,890 3,230 -4 -0.9 Caribbean Barbados 1,380 20 Guadeloupe 1,080 -1 Guyana 1,000 390 -26 -4.4 Jamaica 1,190 940 -34 -1.5 Suriname 1,660 60 Trinidad and Tobago 1,600 4,210 -16 1.3 Source: The World Bank (1989b); U.S. Department of Health and Human Services (1989); Chapman and Wong (1990). Aged 18 years or older. `GNP = Gross national product. $1982-1988 data. because of a shift in consumption from traditional forms of tobacco to modern, machine-made, quality- controlled, flavored cigarettes made from blends of tobacco, including fabaco rubio, a flue-cured tobacco. Some authorities have suggested that the develop- ment of filter-tipped cigarettes and long, slim ciga- rettes has increased smoking among women (see Chapter 2, "The Emergence of the Tobacco Compa- nies"). The addictive nature of tobacco, another demand-augmenting factor, is discussed in a prior report (USDHHS 1988). The degree of competitiveness or structure of the market for tobacco products can also affect the de- mand for cigarettes by operating on retail price, prod- uct differences, and product promotion. In many countries, the market for tobacco products may be reserved for a government-operated or sanctioned monopoly, but cigarette markets in the Americas are characterized by oligopoly-dominance of the market by several large firms (see Chapter 2, "The Emergence of the Tobacco Companies"). Prices tend to be lower and aggregate advertising and promotion expenditures Economics 117 Table 6. Estimates of income elasticity of demand for cigarettes Study Chapman and Wong (1990) Chapman and Wong (1990) Walsh (1980) Witt and Pass (1981) Lewit and Coate (1982) Townsend (1990) Data in Figure 4 Data Worldwide, 1980 Countries with gross national product ~$5,000 per capita, 1980 .55* Ireland, 1953-1976 United Kingdom, 1955-1975 .33 .13 United States, 1976 .08 Europe, 1987-1988 24 countries of the Americas, 1985 Elasticity .45* .46 .49 `Estimates calculated for this report from data provided in Chapman and Wong (1990). tend to be higher in oligopoly markets than in monop- oly markets, because of competition. In addition, oli- gopoly markets are characterized by greater variety as firms attempt to capture market niches for specific products. Cigarette advertising and the sponsorship of en- tertainment, sporting, and cultural events are intended to increase the demand for particular cigarette brands. Measuring the effect, if any, of such advertising on aggregate demand is problematic. Accordingly, pub- lic policy toward cigarette advertising and promo- tional activities is controversial in many countries. Assessment of the impact of tobacco advertising and advertising restrictions was presented in the Surgeon General's 1989 report (USDHHS 1989) and is updated below. Advertising In the United States, cigarettes are one of the most heavily advertised products, and the mix of ad- vertising and promotion has changed over time. Cig- arette commercials have been prohibited from television and radio since 1971. In 1975,75 percent of expenditures were directed toward traditional print advertising media (newspapers, magazines, bill- boards, and point-of-sale posters) and 25 percent to- ward promotional activities, such as coupons, free samples, public entertainment, and allowances to re- tailers (CDC 1990). By 1988, when total expenditures reached $3.27 billion, promotional activities ac- counted for more than two-thirds of all advertising and promotional expenditures. Despite the sizable decline in the use of traditional print media from 1975 to 1988, cigarettes were in 1988 the product most heav- ily advertised on outdoor media, the second most heavily advertised in magazines, and the sixth most heavily advertised in newspapers (CDC 1990). In many other countries of the Americas, tobacco advertising expenditures are substantial (Table 7), despite restrictions on advertising activities (see Chapter 5). The Canadian Tobacco Products Control Act banned all tobacco advertising in the Canadian print media beginning January 1,1989, and required that outdoor advertising on billboards and spon- sorship of sporting and cultural events be phased out (Collishaw, Kaiserman, Rogers 1990). This advertis- ing ban is currently being contested by Canadian tobacco companies in a protracted court case (Col- lishaw, Kaiserman, Rogers 1990). Advertising aims to increase profit by increasing demand for a particular product (Scherer 1980). In oligopoly markets, advertising is used to differentiate Table 7. Estimated advertising expenditures* of tobacco industry in selected countries of the Americas Country Cost United States $3,270.0 Canada 88.0+ Argentina 18.5 Brazil 68.0 Costa Rica 1.8 Dominican Republic 2.4 Ecuador 1.0 El Salvador 0.9 Guatemala 1.8 Mexico 19.8 Panama 1.8 Uruguay 0.7 Source: Philip Morris International Inc. (1988); ERC Sta- tistics International Limited (1988); Centers for Disease $2ontrol(1990); Chapman and Wong (1990). Estimates are for 1986,1987, or most current year available; in millions. `A phased-in ban on tobacco advertising began in January 1989 and is scheduled for completion by January 1993. A court ruling declared the law unconstitutional, but it remains in effect pending appeal (RJR-Macdonald Inc. v. Attorney General of Canada 1990; Imperial Tobacco Limited v. Attorney General of Canada 1990). 228 Economics among similar products and to build sales or to sustain the price of a particular product (Scherer 1980). Ad- vertising attempts to associate smoking with attri- butes generally considered positive, such as high-style living, healthful activities, and economic, social, and political success; it fails to voluntarily provide infor- mation on the substantial hazards of cigarette con- sumption. In emphasizing the positive attributes of a product, advertising may increase demand for both a particular brand and a class of products. Much of the debate over tobacco advertising has focused on whether such advertising increases cigarette sales and, consequently, has a negative impact on public health, or whether advertising is strictly a competitive device tobacco companies use to determine relative market share in a stable or declining market, in which case such advertising would have little effect on public health (USDHHS 1989). The results of many analyses of the effects of advertising on cigarette consumpt-ion were reviewed in the Surgeon General's 1989 report, which cited the conclusion that it is "more likely than not that advertising and promotional activities do stimulate cigarette consumption" (Warner et al. 19861, although precisely quantifying the influence of these activities on the level of consumption may not be possible. Evidence from the Canadian advertising ban and the continuing debate over increasing restrictions on advertising in the United States (Koop 1989) and other countries suggest that focus has shifted from the impact of advertising per se to the effects of advertis- ing restrictions on consumption. An extensive study of this issue was performed by the New Zealand Toxic Substances Board (1989) in support of its recommen- dation for a total ban on tobacco promotion in that country. The relation between tobacco advertising bans and tobacco consumption was examined from 1976 to 1986 in 33 countries. The study demonstrated that "government tobacco advertising bans and con- trols are accompanied by enhanced rates of fall in tobacco consumption" (page xxiii) and that "the greater a government's degree of control over tobacco advertising and promotion, the greater the annual average faI1 in tobacco use in adults and young people" (page xxiv). As a follow-up to the New Zealand report, Laugesen and Meads (1990) examined the effects of tobacco advertising restrictions, price, and income on tobacco consumption between 1960 and 1986 in 22 economically developed countries. They found that a total ban on tobacco advertising would have lowered average consumption by 5.4 per- cent in 1986 in countries without a total ban at that time. However, these studies have limitations-pri- marily a failure to account for the potential bias that antitobacco sentiment may be stronger in countries that ban advertising than in countries that do not. Accordingly, restrictions on tobacco advertising are, to some extent, markers of antitobacco sentiment, and a portion of the decline in consumption in countries with bans may be attributable to this sentiment rather than to advertising restrictions. In addition, both studies primarily included developed countries with a high but declining level of tobacco consumption. Extrapolation of these findings to less-developed countries with different patterns of tobacco consump- tion may be inappropriate. Supply of Tobacco Tobacco, which is grown in more than 120 coun- tries, is the most widely grown nonfood crop. It is grown in most developing countries, and the share of tobacco production in developing countries has in- creased steadily from 50 percent of world production in 1961 to 1963 to 58 percent in 1972 to 1974 to 69 percent in 1987 (Stanley, in press) (also discussed in Chapter 2, "The Emergence of the Tobacco Compa- nies"). In the past decade, most of the increase in worldwide tobacco production has been in China, which accounts for about 34 percent of total world production (Table 8). Major producers in the Ameri- cas include the United States (almost 10 percent of Table 8. Share of world tobacco production, 1990 Country Major producers China United States India Brazil USSR Other producers in the Americas Canada Argentina Mexico Cuba Colombia Dominican Republic Paraguay Venezuela Chile Production* 33.5 9.8 7.3 6.3 5.4 1.1 1.0 0.9 0.6 0.6 0.4 0.3 0.2 0.1 Source: Food and Agriculture Organization of the United Nations (1990). *As percentage of world output; computed from weight of crop. Economics 119 total world production) and Brazil (about 6 percent). Worldwide, about 22 percent of tobacco leaf by weight is grown in the Americas. Tobacco production is in- creasing more rapidly in developing than in devel- oped countries and is expected to increase in developing countries to more than 72 percent of world production by the year 2000 (Food and Agriculture Organization of the United Nations [FAO] 1990). In the Americas, tobacco production is expected to de- cline from 23 percent of world production in 1984 to 1986 to 21 percent by the year 2000 (FAO 1990). Considerable differences exist between the quality and, hence, the price of tobacco leaf produced in different countries. For example, tobacco grown in the Americas is worth almost four times as much as tobacco produced in China, although by weight, the American crop is only 65 percent of the Chinese crop (Agro-economic Services Ltd. and Tabacosmos Ltd. 1987). Tobacco production is mainly concentrated on small farms in limited geographic areas. The value of the typical tobacco crop frequently makes tobacco an important source of income not only for growers but for local agricultural workers, even though tobacco is often grown in rotation with other crops. Compared with most other crops, tobacco uses little arable land (about 0.3 percent worldwide), but tobacco cultivation is labor intensive (Table 9) (Muller 1978). The tobacco industry's ability to create employment is valued in areas where labor is plentiful and production alterna- tives are few. Millions of persons are involved in or dependent on some stage of the tobacco-production process for a portion of their livelihood (Agro- economic Services Ltd. and Tabacosmos Ltd. 19871, Table 9. Labor* and land use in tobacco growing, processing, and manufacturing in the Americas, 1983 - Country North America United States Canada Latin America Argentina Bolivia Brazil Costa Rica Chile Colombia Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela Caribbean Tamaica Growing No. FTE+ 66.80 105.40 43.90 600.00 288.90 3.76 1.93 302.00 100.50 20.00 17.00 24.20 6.55 1.23 1.23 351.00 117.00 10.00 95.00 59.68$ 77.00 228.08 75.80 20.40 8.10 31.18 9.58 3.50 22.90 9.73 43.87 1.95 9.35 40.10 1.48 0.44 4.81 1.44 3.57 215.76 352.00 42.00 108.00 23.20 55.02 12.20 197.50 22.00 100.00 Processing and manufacturing Distribution FTE - No. FTE 7.70 120.20 2.60 30.30 13.40 0.93 1.52 25.90 1.90 6.70 Arable land used (%I 0.21$ 0.20 1 .oo 0.50 0.20 0.10 0.40 2.10 1.10 0.10 0.50 0.40 0.10 0.50 0.10 0.20 0.20 1.70 0.10 0.10 0.20 0.40 Source: Agro-economic Services Ltd. and Tabacosmos Ltd. (1987); Chapman and Wong (1990). *In thousands of workers. +FTE = Full-time equivalent. SFor 1989; U.S. Department of Agriculture unpublished estimates. 120 Economics and persons in certain regions may substantially de- pend on tobacco. Tobacco farming is also highly seasonal. If the work could be spread evenly throughout the year, the average-sized tobacco farm could be managed by one full-time farmer, with some time remaining (Stanley, in press). However, because many workers are needed for harvesting and planting, tobacco farming provides many countries with part-time, seasonal em- ployment for many laborers (Table 9). The average number and full-time equivalent (FTE) number of workers employed in tobacco growing and other aspects of the tobacco industry vary widely in the Americas. After tobacco is harvested, the crop is processed in various ways before being made into cigarettes and other consumer products. This processing includes sorting and grading, curing and drying, and destemm- ing the raw tobacco leaves. In most countries, these activities occur in agricultural areas and are included in statistics for the agricultural sector. In other coun- tries, some of these activities are associated with the initial stages of the manufacturing process and are included in statistics for that sector. Many features of the tobacco market make to- bacco particularly attractive to growers in many coun- tries. First, and most important, when tobacco is grown extensively, it yields a higher net income per unit of land than most other cash crops and substan- tially more than most food crops. In addition, price does not fluctuate substantially for tobacco as it does for other cash crops. Moreover, in most countries, tobacco growers protect themselves from the unex- pected price fluctuations that plague other crops by negotiating sales prices for crops before planting; growers are paid in cash immediately upon sale (Econ- omist Intelligence Unit 1983). The combination of prenegotiated price and quick sale makes tobacco growing easy to finance. The extremely favorable conditions of sale offered to tobacco farmers are not usually offered to growers of other crops. Various combinations of government and transnational tobac- co company activities, including controls on planting, production quotas (guaranteed prices, incentives, and subsidies), import duties, state tobacco monopolies, state trading in tobacco, foreign aid programs, and limitations on marketing, benefit tobacco growers in many countries. As a result, much of the risk of tobac- co growing is shifted from the farmer to the purchaser. Although tobacco provides most farmers with higher gross returns per hectare than many other crops do, considerable costs are associated with to- bacco growing. In addition to being labor intensive, tobacco cultivation requires large amounts of fertiliz- ers and pesticides, and in many areas, fuel (wood, gas, or oil) is needed for tobacco curing. The U.S. Depart- ment of Agriculture (USDA) estimated that, excluding land and quota cost, the cost of growing flue-cured tobacco in the United States in 1990 amounted to 70 percent of the value of the crop produced (Clauson and Grise 1990). In examining the opportunity costs of tobacco growing in Brazil in terms of alternative crops, Barrows (unpublished) found that the value that labor employed in tobacco growing would have in alter- native activities is the most important factor in deter- mining the profitability of tobacco. Barrows estimated that in 1986 in Rio Grande do Sul, total returns to land, labor, and management for tobacco were 130 percent of those for maniac and 118 percent for potatoes. However, cultivation of tobacco re- quired 7.5 times as many man-hours of labor as man- ioc did and 5.3 times as many man-hours as potatoes did. Accordingly, all of the apparent additional re- turns to the tobacco grower were in fact returns to the additional labor invested, and the actual profitability and net social benefit of the tobacco crop depended on the wage rate and the potential alternative uses of the labor employed in tobacco growing. Manufacturing Most of the tobacco grown worldwide is flue- cured and processed on the farms. Tobacco is then manufactured into cigarettes, cigars, smokeless tobac- co products, and loosely cut smoking tobacco. About 85 percent of worldwide tobacco production is used for cigarettes. Flue-cured tobacco accounts for almost 60 percent of the tobacco in American-style cigarettes and all of the tobacco in British-style cigarettes. The manufacturing of cigarettes provides sub- stantial employment in many countries, but the labor intensity of cigarette manufacturing varies consider- ably by country. In the United States, production is highly automated; seven factories produce enough cigarettes for the domestic market and for the large and growing export market. In Latin America, ciga- rette manufacturing is less automated and more labor intensive (Table 9). Cigar manufacturing is more labor intensive than cigarette manufacturing, which is reflected in the employment figures for countries that are important producers of cigars (e.g., Cuba and the Dominican Republic). Distribution Tobacco is distributed in many forms. Ciga- rettes are sold in cartons of 10 packs and in packs of 10, 15,20, and 25 cigarettes. In many areas, street vendors Economics 121 sell cigarettes individually from broken packs. In some countries, cigarettes are sold by tobacconists; however, cigarettes and other tobacco products are typically sold by retail merchants who also sell a variety of other consumer goods. Accordingly, in most countries, total employment in tobacco distribu- tion is many times FTE employment because tobacco sales represent a small part of the employees' jobs (Table 9). Distribution in the tobacco sector is a small com- ponent of larger distribution activities in most econo- mies. Although attributing some proportion of employment to tobacco distribution activities is statis- tically appropriate, such attribution may be inappro- priate for analytic reasons. In the absence of tobacco products, consumers would purchase alternative goods, and the production of these goods would result in employment-not only in the distribution sector but in the manufacturing and farming sectors as well. Although the level and type of employment generated by alternative consumption patterns may change with changes in the tobacco sector, total employment would not change significantly. Some persons, how- ever, may be affected by shifts in consumption pat- terns; some persons may become unemployed, and some may change jobs or job activities. The tobacco industry also creates output in other parts of the economy-both directly, by creating de- mand for products such as fertilizers, fuel, and paper used in the manufacture of tobacco products, and indirectly, when persons employed in the industry spend their earnings for their own consumption. Every economic activity, however, has both direct and indirect links to other economic activities. The exact nature of the links differs among industries and coun- tries, but the net aggregate effect of shifts in demand into or out of specific industries is small, except per- haps for some transitional costs. Exceptions may occur, however, for factors that receive higher-than- normal returns (called "rents" by economists) from a specific activity. Such factors are particularly disad- vantaged by a reduction in rent-producing activity; however, even their losses are balanced by gains to other factors of production or to consumers. Trade Most tobacco is consumed within the country of production; only 25 percent of world production is traded internationally, primarily as a raw commodity. Only the United States, the United Kingdom, and the Netherlands are important exporters of cigarettes, and the United States is the leading cigarette exporter-at 25 percent of the worldwide total. In addition, the United States exports much high-quality tobacco, which in several countries, is blended with tobacco from other sources to make the increasingly popular American-style cigarettes. The United States imports oriental tobaccoand other less-expensive filler tobacco to blend with U.S.-produced tobacco to make ciga- rettes for domestic consumption and export. Brazil, another major tobacco exporter sells much of its crop in Europe. On the whole, countries in the Americas have a substantial balance-of-trade surplus in tobacco (Table 10). Subsidies to Tobacco Production Subsidization may be used in an attempt to de- velop or protect a domestic tobacco industry or to control the importation of cigarettes or tobacco to conserve foreign exchange. The growing and curing of tobacco is frequently controlled and directed by the main tobacco purchasers-either large, private com- panies or government agencies. In many areas, these organizations set the price of tobacco before planting and provide seeds or seedlings to tobacco farmers, who are thus guaranteed a minimum income for their crop at harvest time. These production controls are primarily designed to encourage the production of a limited amount of high-quality, marketable tobacco (Lewit 1988). The situation in southern Brazil exemplifies an industry-sponsored support program for tobacco growers that has fostered the development of a tobacco- growing sector. The cigarette manufacturers provide the growers with all purchasable inputs-including seed, pesticides, and fertilizers-at wholesale prices, and maintain agricultural extension programs to de- velop tobacco plants and technology appropriate for the area. Farmers are visited regularly by technical advisers provided by the tobacco companies. The purchasers also control the chemicals used in growing tobacco so that the crop will conform to U.S. and European standards and be exportable (about 37 per- cent of the Brazilian crop is exported) (Economist Intelligence Unit 1983). The value of the extension services rendered to farmers is estimated at 30 to 35 percent of the prices paid to farmers for the tobacco (Economist Intelligence Unit 1983). A similar relationship exists in Venezuela among the government, two tobacco processors, and several hundred tobacco farmers. The farmers receive finan- cial and technical aid from the companies, along with guaranteed prices for crops. As a result, the compa- nies have some control over the quality and quantity of the tobacco crop, but the companies can also set retail cigarette prices. The Venezuelan government 122 Economics Table 10. International trade in tobacco, 1984 and 1985* Country Imports Exports Total Percentage of Total Percentage of Trade value all imports value all exports balance 0.1 1.3 0.6 1.7 0.1 0.6