The CATO Institute on June 12, 2009 released a podcast about smoking that provides some good examples. The examples are especially relevant for OK State University, who recently banned smoking on campus.
Importance of Incentives - Cigarette taxes are intended to curb smoking and thus positively influence the smokers' health. Yet, if each cigarette costs more, smokers have the incentives to smoke each cigarette more intensely. Scientific studies have shown that this greater intensity in smoking outweighs the reduction in the number of cigarettes smoked, such that the cigarette tax negatively impacts the smokers' health.
Law of Unintended Consequences - Regulation of tobacco is often justified on the grounds that the health care of smokers is paid for in part by society at large. Thus, improving the health of smokers reduces the cost society pays in taxes and such. However, studies have shown that if all smokers ceased smoking, they would indeed live longer. More importantly, they live longer in their elderly years, drawing more money in social security, medicare, and medicaid. As a result, smokers who quit actually increase government costs by living longer, an unintended consequence.
