Abstract

Objectives: Epidemiological surveys make it clear that youth smoking contributes to both current and future tobacco industry revenue: over 80% of adult smokers reportedly began smoking before age 18. This paper estimates annual and lifetime revenue from youth smoking, and highlights the association between declines in youth smoking and declines in tobacco industry revenue.

Main outcome measures: This paper reports the amount of tobacco industry revenue generated by youth smoking at two points in time (1997 and 2002), and describes the distribution of youth generated tobacco income among the major tobacco companies. The authors project the amount of tobacco industry revenue that will be generated by members of two cohorts (the high school senior classes of 1997 and 2002) over the course of their lifetimes.

Results: In 1997, youth consumed 890 million cigarette packs, generating $737 million in annual industry revenue. By 2002, consumption dropped to 541 million packs and revenue increased to nearly $1.2 billion. Fifty eight per cent of youth generated revenue goes to Philip Morris USA, 18% to Lorillard, and 12% to RJ Reynolds. The authors project that, over the course of their lives, the 1997 high school senior class will smoke 12.4 billion packs of cigarettes, generating $27.3 billion in revenue. The 2002 high school senior class is projected to smoke 10.4 billion packs, generating $22.9 billion in revenue over the course of their lives.

Conclusions: Cigarette price increases from 1997 to 2002 have resulted in greater revenue for the tobacco industry, despite declines in youth smoking prevalence. However, in the absence of further cigarette price increases, declines in youth smoking are projected to lead ultimately to a loss of approximately $4 billion in future tobacco industry revenue from a single high school cohort.