Episode Transcript
Stephen DUBNER: Hey, so Levitt what’s the most exciting news you think that we could tell the people who listen to the Freakonomics Radio podcast?
Steve LEVITT: That after four or five years we actually managed to write another book.
DUBNER: Indeed. So you want to tell them about it a little bit?
LEVITT: No, you tell them. You are better at talking about the books.
DUBNER: How about we tell them together?
LEVITT: OK.
DUBNER: The date?
LEVITT: May 12.
DUBNER: Uh, try again. The date?
LEVITT: May 12.
DUBNER: Uh, try again. (It’s May 13, OK.) The date?
LEVITT: May 13!
DUBNER: OK, the title of the book?
LEVITT: Think Like a Freak.
DUBNER: OK, you got that right. That’s something. So Levitt, would you say this is your most favorite book of all time?
LEVITT: You know, I really can’t tell. I can’t tell whether it’s good or terrible. I mean, the one thing I like best about it is that after we wrote SuperFreakonomics we said, “Let’s just not write the same book over and over and over.” And we weren’t sure if we’d ever write another book, but then we had this idea to do something that’s more like a — almost like a how-to book, how to think like a freak — and it’s different. And it is hard to tell if things that are different are good or not, but at least it is different, and I think that is a good start.
DUBNER: It is different! The full title is Think Like a Freak: The Authors of Freakonomics Offer to Retrain Your Brain. And we cannot wait for you to read it. You can pre-order the book now on Amazon, BarnesandNoble.com, iTunes, and all your better online vendors. You can also read more about it at freakonomics.com, and you can also check out our upcoming in-person and media appearances. We’ll do a U.S. book tour about seven cities and a U.K. book tour including Wales — check out the website to see if we’re coming to where you live, and if so, come say hello. You’ll also be hearing a lot of new podcasts based on our favorite stories from Think Like a Freak and, here’s the best news: We’re starting a Think Like a Freak Book Club right here on the podcast. So once the book is out and you guys have a chance to read it, Levitt and I will take your questions, or complaints, or whatever. If you want advice if you, too, can think like a Freak. And we’ll have a great time. Now for our regularly scheduled episode of Freakonomics Radio.
[SFX: cash register]
OK, here’s a riddle. Name an activity that many, many millions of people do, of their own free will – but that 70 percent of them, at least in the U.S., say they don’t want to do. That doesn’t make sense, does it? What kind of thing could be so enticing and yet so unappealing at the same time?
MAN: So it’s kind of like a win/lose, love/hate.
WOMAN: It’s a good anxiety killer, so….
WOMAN: It’s kind of like a relief like, ahhh.
WOMAN: You get a rush from it.
MAN: It’s terrible but it works.
MAN: It’s delicious.
Hmm, “delicious,” “you get a rush.” Maybe eating chocolate cake?
MAN: Kinda gross, I really hate the way it makes me smell.
MAN: I picked it up when I was young and I thought it was cool
MAN: Cause they’re my babies, I love them so much.
Not eating chocolate cake. So what is this delicious, gross, love/hate activity?
MAN: What I just did there was the first inhale and that’s the best one it never gets better than that.
MAN: Sit there for a while, yeah it’s pretty much just a satisfaction guaranteed.
MAN: You get the flavor, feels fantastic.
MAN: I love cigarettes.
ANNOUNCER: From WNYC, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here’s your host, Stephen Dubner.
It’s hard to find anyone to argue that smoking cigarettes is, on balance, a good thing to do. But even when smokers want to stop, they can’t.
MAN: When I quit I end up feeling really good, and then I feel like I’ve achieved something, and then I think I deserve a cigarette for that.
MAN: Yeah, I’ve quit before for a few months. But then I fall back in the habit.
MAN: I feel like I’ll someday just, like, stop.
WOMAN: I’m trying to quit now, forever, it’s a process.
WOMAN: I’m sick of waking up, having the, “Oh, first thing I gotta do is smoke a cigarette!” and you know I can’t breathe walking up the steps.
WOMAN: I need to quit, I’ve tried many times, I fail every time. Tremendously.
Now, how hard is it to quit?
Jeffrey HARRIS: When an individual smoker tries to quit, many times in a year, many of the quit attempts last half a day. Most smokers, even if they make a serious attempt to quit, have relapse rates on the order of 90 percent.
Ninety percent — yikes! Why so high? This is Jeffrey Harris. He’s an economist and physician at M.I.T.:
HARRIS: Basically we’re dealing with a substance, nicotine, which is addictive.
Kenneth WARNER: I have a profound appreciation for addiction.
And that is Kenneth Warner. He’s an economist at the University of Michigan’s School of Public Health. When it comes to smoking — and quitting — Warner knows whereof he speaks.
WARNER: Well, I was very good at quitting. I quit for six months one year, and I then quit for three months the next year, and I quit for a month the year after that. And then I quit quitting for a while. And finally I decided I was going to smoke myself silly on a poker game on Dec. 27, I think it was, of 1974. I took an entire pack of cigarettes, smoked through the pack, and went home feeling sick because I’d smoked so many cigarettes. I said, “I’m never gonna touch ‘em again” and I haven’t.
DUBNER: Warner has been doing tobacco-policy research since the 1970s – the trends, the health and financial consequences, the politics, and so on:
WARNER: I’m personally convinced that when 21st century historians look back on the experience of the rise and fall of the cigarette – they’re going to call this not only one of the most important public health stories, but also one of the most interesting public health stories.
OK, what’s so interesting?
WARNER: It’s just this incredible epidemic. And through the use of various public-health techniques — through education, through taxation, smoke-free laws and so on – we’ve managed to cut the rate of smoking by more than half.
Cigarettes first came into popular use in the U.S. around the time of the Civil War. There was not much thought given to negative health effects. In fact, tobacco was sometimes prescribed as medicine. By the early 1960s, 42 percent of the adult population smoked.When the government began collecting data on high school students, in the early 1990s, it turned out they smoked at an even higher rate than adults. So for many, many years, you had a lot of people doing a lot of smoking. It was part of the scenery.
[CLIPS: cigarette advertisements/television clips]
But health experts began to make connections between smoking and illness. And in 1964, after a build-up of research, the United States Surgeon General issued a milestone report.
[CLIP: Surgeon General Report announcement, 1964]
Here’s Kenneth Warner again:
WARNER: It’s really one of the seminal documents of public health. Now in fairness, the Royal College of Physicians in the U.K. had issued a report in 1962, which was also very powerful. The ’64 report is really the turning point in smoking in the United States. Smoking was rising almost uninterrupted – there were a couple of interruptions – but virtually uninterrupted through 1963. Surgeon General’s report comes out in 1964, and it’s one of the biggest news stories of the year – and all of a sudden that year smoking drops 3.5 percent. It waffles around a couple of years. And then it starts dropping. And from 1973 to now it has dropped almost every single year. And we’re back to where we were in the 1930s.
The Surgeon General’s report helped start an anti-smoking movement that over the ensuing decades came to include public service campaigns, advertising bans, and the prohibition of smoking in offices, on airplanes, and more recently in restaurants and bars. Even in Central Park in New York City: No smoking allowed. But measuring the efficacy of this kind of thing can be hard. There are a lot of potentially confounding factors to account for. There is one variable, however, that does lend itself to good measurement: the cost of cigarettes.
WARNER: The effects of tax and price are more well studied than any other area of tobacco control. We have a lot of data about that.
OK so what do the data say?
WARNER: What we know is that if you increase the price by 10 percent you will decrease total cigarette consumption by 3 to 4 percent.
Now, you may think, “Well, of course Warner would talk about price theory – he’s an economist!” But even a layperson can look at the data and see the relationship between cigarette prices and smoking. The economist Frank Chaloupka has calculated the inflation-adjusted price spike of cigarettes over the past few decades, and where that spike comes from. Overall, he found that a pack of cigarettes costs more than twice as much today as it did in 1990. Some of that increase comes from the manufacturers – especially since the late 1990s, that’s when cigarette companies began passing along the costs from the Master Settlement Agreement. That was the deal between the big tobacco companies and 46 state attorneys general, which required the companies to pay out billions of dollars for, essentially, producing a dangerous product. By passing along some of that settlement cost to smokers, the companies added about 50 cents a pack. But a variety of taxes also made cigarettes much more expensive. Between 1990 and 2009, Chaloupka found the federal excise tax on cigarettes rose from 16 cents to more than $1 per pack. And state taxes, on average, more than quadrupled. Now, keep in mind that’s on average. There’s huge variance across states. Missouri adds only 17 cents a pack; Rhode Island adds a state tax of $3.46 per pack! On top of of all that, some cities add their own taxes. In 2002, for instance, New York City raised its excise tax from 8 cents a pack to $1.50. So, today, a pack of cigarettes in New York City costs, on average, more than $11. It is probably not coincidental, therefore, that New York State has one of the lowest smoking rates in the country. And who does an $11 price tag hit the hardest? The smokers who are most “price sensitive” – like teenagers. Indeed, between 2000 and 2012, the smoking rate among high schoolers in New York State fell by 56 percent. So if you want to fight smoking, you can see why economists, at least, agree that raising the price will work. Here’s Kip Viscusi, at Vanderbilt:
Kip VISCUSI: It’s a very powerful tool. You know, it doesn’t wear out. As you keep on the increasing price, it will keep on decreasing the demand for cigarettes.
But just as different states in the U.S. have wildly different tax rates on cigarettes, different countries have wildly different cigarette taxes and prices, which are influenced by all sorts of factors. In China, for instance, the average cost is about $2 per pack of cigarettes; in Australia, it’s about $11, with talk of pushing that up to $20 a pack. And smoking rates around the world are extremely diverse. Among the lowest are the U.S. and Canada, Australia, much of South America, and most of Africa. Europe is generally in the middle, and Asia – well, if you look at the World Health Organization’s map of smoking rate by country, Asia is basically one big cloud of smoke. But even in the U.S., where as Kenneth Warner told us, we’ve returned to the smoking rate of the 1930s, that still translates into a lot of smokers:
WARNER: About 45 million adult Americans are smokers today. That’s approximately 18 to 20 percent of the adult population. Cigarettes are currently killing 480,000 Americans annually. That’s one out of every five deaths in the nation. In other words, one out of every five deaths is completely avoidable. And the people who die as a result of smoking are losing up to 20 years of life expectancy.
In other words: We’ve come a long way (baby), but we’ve still got a long way to go. So, coming up on Freakonomics Radio: What’s next? If your goal is to drive smoking rates down even further, maybe even eliminate smoking, where do you turn? How about Uruguay?
WARNER: Here’s this relatively small country in South America, they had a president elected who is an M.D. and was very health-conscious, and they have adopted some very significant policy measures that we haven’t in some instances seen before.
And we’ll flip the conversation on its head, and ask: What is smoking good for?
Paul NEWHOUSE: We jokingly say in our lab, you know, “Good drug, bad delivery system.”
OK, so what do we know so far? Smoking cigarettes, it is generally agreed, is bad for us. It’s also addictive, which makes it hard to quit. What does get people to smoke less? Making cigarettes really, really expensive seems to work pretty well but a) simply raising prices, or taxes, isn’t necessarily so simple, especially because people who do smoke are happier when prices are lower; and b) even where cigarettes are fairly expensive, like the U.S., the adult smoking rate is still about 20 percent. So what else might work? Where else can we learn from?
WARNER: Uruguay is a fascinating story.
That’s Kenneth Warner again. He’s an economist at the University of Michigan’s School of Public Health.
WARNER: Here’s this relatively small country in South America, they had a president elected who is an M.D. and was very health-conscious, and they have adopted some very significant policy measures that we haven’t in some instances seen before.
And here again is Jeffrey Harris, he’s an economist-slash-M.D. at the Massachusetts Institute of Technology:
HARRIS: So, in many ways it’s been a pioneer. It’s been a laboratory so to speak for economists to study what is the impact of smoking-control programs.
Harris, along with two co-authors, recently put out a working paper called “Tobacco Control Campaign in Uruguay: Impact on Smoking Cessation During Pregnancy.”
Now, you may be thinking,”Why Uruguay?” Well, in 2003, the World Health Organization put together a global health treaty to cut smoking – and, of the 177 countries who signed on, Uruguay has been among the most aggressive in trying new things. As Jeffrey Harris tells us, they were responsible for a lot of “firsts”; they were the first to …
HARRIS: To do things like ban smoking in all public spaces, but also enclosed, private spaces. It really was the first country not to just put images on each pack of cigarette as part of the warnings, but also to mandate that the images be up to 80 percent of the front and back of each pack.
What kind of images is Harris talking about? Here’s Kenneth Warner:
WARNER: They show diseased lungs, they show people smoking through their trachea, they show pregnant women with their fetus getting exposed to smoke and things like that.
OK. What else did Uruguay do?
HARRIS: It was the first country to outlaw multiple versions of the same brand. A cigarette manufacturer could basically in the past have a cigarette brand that was the main brand, a lite brand, a menthol brand. In Uruguay you can only have what they call a “single presentation.”
Uruguay also banned cigarette advertising, and raised taxes on cigarettes; they enlisted doctors and health centers to encourage people to quit smoking. Jeffrey Harris decided to examine all these different anti-smoking measures to figure out which of them were most effective. The population he chose to concentrate on: was pregnant women. Why? Two reasons: One, they’re an important population, since a fetus is particularly susceptible to the harmful effects of smoking. And two: The pregnant women presented a good, controlled data set. Harris and his co-authors had access to a national registry of all pregnancies, which included information on whether the women smoked, if they quit, and when they quit. The researchers tracked about 30,000 women, from 2007 to 2012. So what’d they learn? First of all, the overall quitting rate among these women rose dramatically:
HARRIS: At the start of our observation period, in, 2007, about 15 percent of women who smoked during pregnancy quit by their 3rd trimester – that is, the last three months of the nine-month pregnancy. By 2012, the percentage was up to 42 percent. The marked increase from 15 percent in 2007 to 42 percent in 2012, as far as we know is unprecedented.
Now, granted, you might think that pregnant women have a stronger incentive to quit than most smokers – but still, only 15 percent of pregnant smokers were quitting before. And now the quit number was 42 percent. So that’s huge! So what led to all this quitting? Remember, there was a whole cocktail of anti-smoking measures in Uruguay: tax increases, a ban on advertising, the use of graphic imagery on cigarette packs and so on. Jeffrey Harris was able to tease out the most effective measures from the data. Raising the cigarette tax, it turned out, didn’t work as well as it did in the U.S.:
HARRIS: While we have no doubt that price has an effect, in the big picture in Uruguay, it had a relatively small contribution, in part because the tobacco industry reacted to those price increases.
In other words, when the government increased the cigarette tax, the manufacturers lowered their prices so the consumer wouldn’t feel such a hit. According to one calculation, the average price of a pack of cigarettes in Uruguay is $3.61, compared to $6.36 in the U.S. According to Jeff Harris, it was two non-price initiatives that really moved the needle in Uruguay. The first was the “single presentation” rule — basically, you only get one version of each cigarette brand. So, no menthol, no mild. Just one choice per brand:
HARRIS: The objective of the government really was to avoid any possible implication that a particular brand was safer or less hazardous than another. Earlier on the government had banned or prohibited such words as light, smooth, low-tar, but it turns out that a lot of research that’s been done throughout the world, not just in Uruguay, indicates that even the color falsely suggest that a cigarette is safer.
What else worked? The graphic, grotesque imagery on the cigarette packs.
HARRIS: They would have an image of a baby that looked like the baby was in neonatal intensive care, sometimes connected to something that looked like oxygen and saying, asking the smoker in Spanish, roughly, is this the life you chose to give him.
Now, you may naturally wonder, “If the U.S. has reduced its smoking rate so much without the use of such graphic imagery like that, what would happen if we did use it?” That, says Kenneth Warner, is hard to say:
WARNER: We were supposed to have that here a year ago last September. And of course the tobacco industry sued to prevent it. And we’re now back, or I should say, the FDA is now back at the beginning with that one.
As we noted earlier, there’s a lot of variance around the world in how smoking is treated. There’s also a lot of variance in who smokes, and who doesn’t. Jeff Harris again:
HARRIS: Approximately 80 percent of all tobacco use in the world now occurs in low and middle-income countries. And within a short amount of time 80 percent of all the deaths attributable to tobacco use will also occur in those countries.
And how many deaths will that be?
HARRIS: The World Health Organization has estimated that now on the order of five million people will die on an annual basis as a result of tobacco use throughout the world. And another 600,000 will die from secondhand or environmental tobacco smoke.
Now, if you are primarily a humanist, you have to see all this death as terrible news. Five million preventable premature deaths a year! If, however, you are primarily an economist – like Kip Viscusi – you may also calculate the cost savings from all that smoking death:
VISCUSI: We actually have a cost per pack, so we actually know that smokers on balance save us 32 cents a pack through smoking due to decreased pension cost, nursing home care cost and the like.
This, of course, is a controversial argument. In 2001, a report commissioned in the Czech Republic by Philip Morris, the tobacco company, was met with outrage. Kenneth Warner told us the story:
WARNER: Yeah there was a consultant, a tobacco industry type consultant, who told the Czech government in 2001 that they shouldn’t want their citizens to quit smoking because if they did you would have all those horrible old age costs. You would have to provide housing. Take care of medical care. Subsidize incomes and pensions. And on and on. And of course this blew up in their faces when it became public but you know — there’s a grain of truth there.
But just because economists can measure the medical costs of less death from smoking doesn’t mean they’re hoping for more death from smoking. Here’s Jeff Harris:
HARRIS: You have to be careful about this. I don’t think that you can just make the argument that quitting smoking has a certain cost to society without asking the same question — will any other improvement in our public health, would have the same cost.
It’s also worth noting that, just as low-income countries are more likely to have more smoking, in the U.S. also, there’s a socioeconomic split that helps define who smokes and who doesn’t. Here’s Kenneth Warner:
WARNER: If you look at the population that is at the poverty line or above it, about 18 percent of them are smokers. If you look at the population below the poverty line, it’s about 29 percent. If you look at college graduates, 7.5 percent of them smoke today. If you look at people with only nine to 11 years of high school education it’s about 36 percent percent. If we go back to the time of the Surgeon General’s report…
That, remember, was 1964.
WARNER: …those numbers were very close to each other. So that’s a huge issue, is a socio-economic disparity. And then there is one we that have finally started to recognize and talk about in the field of tobacco control and it is very important — perhaps as many as 40 to 50 percent of all smokers have a concurrent mental health disability or morbidity and/or other substance-abuse problem. The cigarette industry has always liked to talk about smoking as being a rational choice of well-informed adults and yet we have this strong correlation between smoking and mental illness.
So this opens up a whole other way to look at smoking – that it is, to some degree, self-medication, with side effects of course. Paul Newhouse is an M.D. who runs the Center for Cognitive Medicine at Vanderbilt. For 30 years, he’s been studying the effects of nicotine on the brain:
NEWHOUSE: We jokingly say in our lab, you know, “Good drug, bad delivery system.”
Newhouse tells us that nicotine itself has a number of potentially positive characteristics.
NEWHOUSE: It appears to activate a class of what we call “receptors,” important for regulating a whole variety of brain functions. And so we think that nicotinic receptors are important for things like attention, for behavioral strategies, for what we call “executive functioning,” which is the ability to make decisions and evaluate information, we think it’s important for memory, and so that has kind of led us to thinking about what particular disorders might be helped by stimulating nicotinic receptors either with nicotine or with something else.
So Newhouse and others in his field are exploring if nicotine therapy might be used to treat schizophrenia, Parkinson’s disease, or other maladies.
NEWHOUSE: Things like memory loss disorders, Alzheimer’s disease, pre-Alzheimer’s disease, which is called “mild cognitive impairment,” we’ve looked at ADHD, attention deficit hyperactivity disorder. Other investigators have looked at things from Tourette’s Syndrome to anxiety disorders to depression. I think the full potential of nicotine and nicotinic drugs is really not even fully known yet.
Newhouse does believe, however, that nicotine has medicinal effects, and that is why some smokers smoke:
NEWHOUSE: If you look at heavy smokers you will find that many of them have mood disorders or anxiety disorders as well. The rates of psychological problems among heavy smokers these days are very high. And we think that one of the reasons they smoke is because it produces benefits to them. Maybe it improves their mood, maybe it stabilizes their anxiety, maybe it helps them pay attention or inhibit impulsiveness, etc.
So that may be one reason why so many smokers, even when they say they’d rather not smoke, can’t quit. The fact is that all these anti-smoking measures we’ve talked about today – warnings, taxes, advertising bans, and so on – are a pale imitation of some historic anti-smoking measures, and they didn’t necessarily work either:
WARNER: Sultan Murad IV back in the early 1600s prohibited smoking, obviously not cigarettes, but he prohibited the smoking of tobacco.
That’s Kenneth Warner again.
WARNER: And in fact it was a severe penalty for smoking. It was punishable by death. And despite the fact that he had that severe penalty, and despite the fact that he executed some smokers, people continued to consume tobacco in its smoked form. Now I want to tell you, there were many ways that he executed smokers but one of them that just makes it picturesque is that he said a person would be drawn and quartered by four strong horses. If that doesn’t get you to quit smoking not much else is going to.
And what, you may ask, did the Ottoman rulers do when even the death penalty failed to dissuade smokers?
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Yep: They taxed ‘em.
Hey podcast listeners. As we mentioned at the top of this show, Levitt and I are putting out a new book — called Think Like a Freak — on May 13. And so, why don’t we do one of our FREAK-quently Asked Questions episodes about it? You know how this works, don’t you? Just send us whatever questions you have, to radio@freakonomics.com, and we’ll answer them. If you want to learn more about the book, you can visit freakonomics.com, where we’ve posted the Table of Contents and some other material. Thanks in advance for whatever questions you send. Meanwhile, on next week’s show we talk to mayors from all over the country — Boston and Los Angeles, from Albuquerque and New Haven — and ask them what the world would look like if they were in charge. That’s next time on Freakonomics Radio.
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