What does each pack of cigarettes REALLY cost?

NY Times article

Interesting, very interesting.   I’m not sure what they mean by “discount rates”, since the link to the actual paper is broken.  That’s obviously a population average.  Try pulling the numbers on someone who dies of secondhand smoke, though.

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3 Responses to “What does each pack of cigarettes REALLY cost?”

  1. The Discount Rate is the rate of interest they use to make their calculations.

    In the low-interest environment (like 3% in the article), costs and gains in the future will be more significant than they would be at a higher discount rate. People who instinctively have a low discount rate tend to factor “the future” into their decisions a lot more.

    On the other hand, High discount rates tend a reflect an “I want it now!” approach to life.

    This seems to be consistent with the findings in the blog, the people who think about the future more are less likely to smoke, which is reflected in the higher cost.

  2. Thanks, MS.

  3. I just knew economics was good for *something* 🙂

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