Is nicotine good for you? Part 1.5 - the social welfare losses of restricting and vilifying nicotine

This is not quite the next part of the series I recently started, in which I will plan to start to analyze the question I defined, “Does long-term consumption of typical quantities of nicotine, not considering any effects of the delivery system, have net positive or negative effects on the overall risk for chronic real disease for the average person?” The “chronic real disease” bit was doing the work of excluding from consideration short-term benefits and costs, as well as non-disease potential negatives in the neighborhood of dependence.

I made sure to emphasize that we can solidly conclude that the net magnitude of the real disease effects, whether positive or negative, is so small it should not have much influence on decisions about whether to consume nicotine. The short-term (real, easily observable) effects are so much greater, and those -- perhaps along with the effects of dependency for those whose selective dependencyphobia (that phobia is always selective) -- are a strong motivator. If you like the effects, you probably like them enough that their welfare benefit exceeds any plausible real disease net health costs, if there are costs. If you don’t like them, then you probably dislike them enough that that exceeds the net real disease health benefit that I hypothesized. Since posting, I have had a few conversations about those points that got me thinking about the big-picture implications of this that I did not mention, but that should have a flag planted in this conversation.

Everyone who talks at all honestly about consumption of nicotine via low-risk delivery systems (snus, nicotine pouches, vaping, patches) mentions that depriving people of access to those products causes more smokers to continue smoking, with all the resulting negative personal health effects and aesthetic externalities. More enlightened commentators also note that adoption of these products prevents many would-be smokers from ever smoking (already putting the lie to the knee-jerk recitations of “it is never good if a teenager vapes”). But a much larger population is also suffering costs from anti-nicotine efforts, and they are almost never mentioned. If nicotine consumption is somewhat beneficial for your health (as I hypothesize), or if it is net harmful by a miniscule bit (quite plausible), and even if it is measurably modestly harmful (seemingly quite unlikely, but not impossible), there is a huge net social welfare loss from discouraging its consumption among people who would not smoke, with or without a substitute, but who would benefit from nicotine’s short-run effects.

If drinks and food containing caffeine were made unavailable by an act of state or successfully socially villainization (this is a magic outcome hypothetical; I am not suggesting either is a practical possibility), the major social welfare loss would not be among people suffering the harmful effects of switching to another drug or delivery system. Some people would switch to ADHD meds or other amphetamines, cocaine, or snorting reagent caffeine (I will neither confirm nor deny), and these would cause some harms. But the overwhelming loss would be to people who benefit from caffeine consumption and were made bereft of it. Nicotine is so similar to caffeine in every way that if X is true for one of them, making a case it is not true for the other is quite difficult. The matter at hand offers no apparent way for making such a case. As with the caffeine hypothetical, there are enormous welfare losses among those who obey prohibitions or comply with vilification of smoke-free nicotine, and those could well exceed the welfare losses among those who are caused to start or continue smoking.

In the previous post, I argued that our best estimate of how many people like the effects of nicotine is half or somewhat more of the population. It is perhaps not quite as many as the large majority of adult humans that consume caffeine regularly, but it might be. In many populations, education about the health effects of smoking pushed nicotine consumption so low that a lot of people (tens of percent of the population) who would very much appreciate the effects were not consuming it. This was probably social-welfare-improving because of the nasty effects of smoking (and because it was mostly free choice, revealed preference supports this conclusion). But disinformation and police power interference with low-risk nicotine products has kept consumption prevalence well below the portion of the population that like the effects. This clearly reduces social welfare and the individual welfare of hundreds of millions of people.

Assessing the magnitude of the social welfare loss from enforced nicotine abstinence is more complicated than a simple “lost consumer surplus” calculation from an Econ 101 class. That theoretical conceptualization is already oversimplified and impossible to robustly calculate even for simple goods. Greater complication comes when we need to factor in the various phenomena that some people sloppily label “addiction”, which are greater for nicotine than for the average consumption choice (though no consumption choice is free from these complications). But it is safe to say the welfare loss from pushing everyone toward abstinence is big. It is very plausible that it is sums up to more than the aggregated costs of 10% of the population switching back to smoking.

The wholesale manufacturing of negative vibes about nicotine creates further deadweight loss beyond the costs from simply avoiding the consumption. It imposes the cost of lowering the welfare of anyone who engages in the behavior but does not have the knowledge and self confidence to just think “f--- those people”. The choice to consume becomes a faddish statement of rebellion (coffee consumption is pretty steady among teenagers, while vaping rolls through in waves), which is not necessarily a problem, but could create that “gateway effect” that the busybodies always pretend to be worried about (probably not toward smoking, for reasons I have explained at length before, but to other drugs via “well, I already did this one drug that they are always telling me is so terrible, and that was fine and no big deal, so why not try this other one too”).

None of these observations are novel. They always result from demonizing what should be a carefully-considered, but otherwise fairly normal and welfare-enhancing individual choice. Demonization of (consensual, age-appropriate) sexual activity, whether it be all such activity or targeted discrimination, has deprived a lot of people of a lot of benefits, and has destroyed lives. Wars on most drugs create nothing but destruction. Demonization makes it impossible to offer measured advice about optimal choices about sex, drugs, etc. to children or even other adults.

But this case seems a bit different because even though it is out in the open, with widespread awareness, and even though there has been ample advocacy around it and even a profit motive for capitalists, no one seems to talk about the problem. I will admit to not contributing enough to fixing that. After all, this series started down the path of a curious scientist, to answer a question about whether small net disease impacts fell on one side or the other of the null. I did emphasize that this has little practical consequence for your choices, and I have made that point many times before, but I have perhaps been too low-key. I still needed a reminder that what appears in this sidebar is far more important than the main thread of analysis. So I will say it again:

Preventing people from using nicotine, by whatever means, for those who would quite like consuming it, imposes enormous deadweight welfare costs that have nothing to do with smoking avoidance.