Cost-Benefit-Analysis of No-smoking Policy Instruments

Cost-Benefit-Analysis of No-smoking Policy Instruments---Case Study of Beijing DAI Yixin[1] XUE Lan[1] HU Yinglian[2] [1] School of Public Policy & Management, Tsinghua University [2] Department of Social & Cultural Studies, Chinese Academy of Governance (CAG)

WHO Framework Convention on Tobacco Control (FCTC) 8. 2 • This is the responsibility clearly given by the WHO Framework Convention on Tobacco Control (FCTC) to all parties which should actively take measures and reinforce effective legislation, administrative regulations within jurisdiction of courts, so as to prevent from exposure to second-hand smoke at indoor working places, public vehicles and indoor public places, as well as other pubic places at a appropriate time.

Tobacco Control Work by Chinese Government • On Nov. 10, 2003, Chinese government signed the Convention officially • On August 28, 2005, The Convention was adopted by Standing Committee of the 10 th National People's Congress • In recent years, under joint endeavor by different regions, relevant departments and the whole society, China strengthen its effort in tobacco control increasingly. Tobacco control theories, legislation, and policy systems have been established and improved persistently, hence guarantee a stable tobacco control status and a favorable turn.

Non-smoking Practice at Public Places in Beijing • On Dec. 21, 1995, the Provision on No-smoking at Public Places in Beijing (here-in-after referred as Provision) was adopted by standing committee of the 10 th People’s Congress of Beijing Municipality • On March 24, 2008, Special Provision on No-smoking Scale of Public Places in Beijing Municipality was adopted by the 2 nd meeting of standing committee by Beijing Municipal Government (here-in-after referred as Special Provision)

I. Key Topic • How to assess effectiveness of no-smoking policy implementation at public places in Beijing?

II. Theory Framework • （1）Effectiveness assessment of provision implementation • （2）Efficiency assessment of provision implementation • （3）Application range assessment of provision implementation

Table 1 Assessment Indexes System of Nosmoking Efficiency at Public Places Primary Index Secondary Index Tertiary Index Daily management fee Direct cost of obliged institutions facilities reform and maintenance fee Advocacy cost reviewer allowances Cost Direct cost of regulated implementing institutions allocated funds self-funded funds tobacco sales revenue loss brought by smoking ban Indirect cost tariff loss brought by smoking ban Profit loss of commercial places brought by smoking ban Health benefit Benefits Safety benefit medical benefits life benefits Reducing loss of fire due to reduce of smoking

III. Study Method • Sampling Areas – 2 urban districts, 2 suburban districts and 1 outer suburban district • Sampling Targets – （1）Public places related to tobacco control work – （2）Legislation executive body – （3）defined obliger by regulation • Subjects • – Provision and Special Provision Methods – Cost-Benefit Analysis combined with multi-social scientific study methods including statistic analysis, expert opinion analysis • First-hand data – Questionnaire, including Questionnaire to obliged no-smoke institutions (n=1244), Questionnaire to the public (n=102), Questionnaire to provision applicable instructions (n=21) • Second-hand data – Literatures home and abroad, literature of law and regulations, Beijing Social & Economic Statistics Yearbook (2005~2008)

Figure 1 Diagram of Distribution Proportion of Sampled Institution A: 医疗机构 B: 托儿所、幼儿 4% 园 3% N: 自愿创立的无 M: 事业单位烟单位 12% 2% K: 休闲游乐场所 1% L: 提供住宿休息服务的经营场所 13% J: 餐饮营业场所和互联网上网服务营业场所 31% I: 健身场所 2% C: 中、小学校 E: 娱乐场所 5% 1% D: 高等学校和其他教育、培训机构 1% F: 商店、金融业、邮电业的营业厅 24% G: 公共交通具 1% H: 对社会开放的文物保护单位 0%

IV. Assessment Findings • 4. 1 Efficiency Assessment • 4. 2 Effectiveness Assessment • 4. 3 Scope Assessment

4. 1 Efficiency Assessment • Significant achievements of tobacco control – Smoking prevalence among population aged 15 and above decreased to 26. 9% of 2004 from 34. 5% of 1997. – The no-smoke prevalence at healthcare institutions, kindergartens, middle and primary schools, store, financial places, and post office reached 90% and above in 2008. • Difficulties in tobacco control work – More than 50% restaurants and internet bars didn’t set up distinct smoking area or have no idea of whether they set up smoking area or not. – Only 33% obliged institutions set up obvious signs for No-smoking – Only 23. 4% institutions realized complete quarantine between smoking area and no-smoking area – In house no smoking difficulties usually concentrated at elevator room and rest rooms.

4. 1 Efficiency Assessment (continued) • Advocacy format adopted by obliged institutions -Compared efficiency of different advocacy formats, mass media campaigns, including no-smoking advertisement, no-smoking bulletin board, dissemination of no-smoking brochures, are of highest efficiency, while internal meeting and website propaganda of related information achieved little effects. • Inspective behaviors of executive body -restaurant is the most important and difficult places for tobacco control, in particular to restaurants of grade C and D.

Figure 2 Relationship between Expenditure and Effect of Different Advocacy Formats

Table 2 Top 5 Categories of Highest Random Inspection Frequency at Primary Level Public Places Random Inspection Frequencies Ranking Of Frequencies Restaurants of grade C and D 5. 56 1 17. 56 2 Nursery/kinder garten 4. 25 2 8. 11 15 Hotel 4. 05 3 9. 28 12 Restaurants of grade A and B 3. 83 4 12. 39 5 Guesthouse 3. 64 5 11. 75 6 Amount of Inspectors Ranking Of Inspectors

Table 3 Top 5 Institutions with Most Law Enforcement Inspectors at Primary Level Public Places Random Inspection Frequencies Ranking of Frequencies Amount of Inspectors Ranking Of Inspectors Classroom of commercial training 1. 5 18 18. 2 1 Restaurants of grade C and D 5. 56 1 17. 56 2 Concert Hall 0. 86 26 13. 2 3 Teaching Area in Campus 1. 3 20 12. 5 4 Restaurants of grade A and B 3. 83 4 12. 39 5

4. 2 Effectiveness Assessment • Though assessment of cost of fulfilling obligations by obliged institutions, we found – （1）Viewing in aspect of mean cost of all kinds of obliged institutions, the absolute value was not high. Calculated according to total sample amount, annual expenditure of each institutions was less than 10, 000 Yuan. – （2） Viewing in aspect of expenditure structure, designating inspector and redecorating places accounted for the most proportion of no-smoking cost, in particular to employing part-time inspectors. – （3） Viewing in aspect of no-smoking expenditure of different institutions, administrative cost of complete no-smoking institutions was obviously higher than that of other institutions, while the in house no-smoking institutions of the least.

Table 4 No-smoking Cost Calculation Form of Different Obliged Institutions Designating Inspector and Executing Function Cost Full-time Inspecto r (Yuan) Part-time Inspector (Yuan) Redecor In House ation Advocacy and & Mainten Education ance Cost (Yuan) 1921. 61 4896. 57 8979. 19 7064. 98 837. 91 23700. 26 21 Partially Nosmoking Institutions 1181. 4 2954. 84 2287. 14 947. 98 759. 62 8130. 98 7 In house 1644. 87 731. 39 2294 2310. 19 344. 68 7325. 13 6 No-smoking Institutions 150 5 810 114. 29 75 1154. 29 1 Cost & Institution Category Gross Daily Administ rative Cost (Yuan) Completely No-smoking Institutions Total Mean Cost (Yuan) Proportio n Relations hip

Table 5 No-smoking Cost Calculation Form of Different Obliged Institutions Code of Institutions Gross Daily Administrativ e Cost (Yuan) Medical Institutions of Grade A Designating Inspector and Executing Function Cost Redecoration and Maintenance Cost (Yuan) In House Advocacy & Education Cost (Yuan) Total Mean Cost (Yuan) Full-time Inspector (Yuan) Part-time Inspector (Yuan) 1010. 00 125. 57 2342. 17 719. 05 1932. 00 6128. 79 Nursery and Kindergarten of Grade B 604. 12 0. 00 1518. 75 400. 59 401. 54 2924. 99 Middle and Primary School of Grade C 1406. 30 141. 38 965. 52 2170. 6 848. 89 5532. 77 D Higher Education Colleges and other educational and training institutions 3500. 00 200. 00 5700. 00 E Recreation Places 663. 64 0. 00 162. 58 932. 27 703. 06 2461. 55 F Shops, Financial and Postal Offices 1499. 10 1550. 68 3582. 12 876. 69 743. 08 7720. 38 G Public Transportation Vehicles 480. 00 1287. 50 125. 00 1460. 00 220. 00 3572. 50 H Historic Preservations Open to Society 850. 00 576. 00 3100. 00 300. 00 4826. 00 I Fitness Gyms 0. 00 782. 61 864. 70 657. 86 583. 33 3264. 69 J Restaurants and Internet Bars 671. 22 366. 76 187. 70 863. 19 637. 20 2726. 06 K Entertainment and Amusement Places 366. 67 533. 33 640. 00 1175. 00 280. 00 2995. 00 L Commercial Places providing accommodation services 2322. 20 714. 20 1401. 97 1100. 00 1026. 63 6564. 99 M Public Institutions 1644. 87 88. 36 384. 90 771. 73 344. 68 3234. 54

Cost of No-smoking Executing Body • Major funds and expenditure is supervised by Municipal Health Promotion Committees. There was distinct deficits in funds and expenditure of county level and below. • The total cost of executing body is far below than obliged institutions’ obliged cost.

Indirect Cost of Execution of Regulations • Tobacco sales revenue loss brought by smoking ban • Taxation loss brought by smoking ban • Profit loss of commercial places brought by smoking ban

Heath Benefits • Health benefits for smokers and passive smokers (namely, people who exposed to second-hand smoke) – Lung cancer – Cardiac diseases – Respiratory diseases

Table 6 Social Health Benefits (Yuan) Brought by Smoking Ban Disease Category Lung Cancer Cardiac Disease Respiratory Disease Reduced deaths 362~410 911~931 441~490 Mean medical cost 40, 000~100, 000 40000~100000 Reduced medical expenditure 14, 472, 317~41, 044, 0 87 36, 420, 213~93, 139, 3 19 17, 650, 199~49, 014, 8 19 Per capita death loss 337, 283~337, 283 Reduced death loss 122, 031, 751~138, 43 4, 834 307, 098, 197~314, 14 3, 327 148, 827, 912~165, 31 8, 779 Total health benefits 136, 504, 068~179, 47 8, 921 343, 518, 409~07, 282, 645 166, 478, 110~14, 333, 598

Economic Effectiveness Manifested by Execution of Provision • According on calculation by cost-benefit analysis, although Beijing Municipality expanded scope and input for execution of Provision, the derived benefits were higher than cost. The social net benefits was between 46, 960, 213 Yuan and 162, 776, 294 Yuan in 2008. Cost of Obliged Institutions (Yuan) Cost of Executing Body (Yuan) Indirect Cost (Yuan) Total Cost (Yuan) 599, 551, 324 6, 576, 110 0 606, 127, 434~6 44, 905, 960 Health Benefits (Yuan) Safety Benefits (Yuan) Total Revenue (Yuan) 646, 500, 587~801, 095, 164 10950 646, 511, 537~801, 106, 144

4. 3 Scope Assessment • Studies show that majority of Beijing citizens possess similar expectations defined by Convention – Over 50% general publics consent with contents defined by Provision, involving complete no-smoking at public places, in particular to public transportation vehicles, taxies, internet bars, and inside institutions. – Over 80% above mentioned general publics are more willing to go to public places after the scope of no-smoking been enlarged to overall no-smoking. Those who is more willing to go to entertainment places were less, of 62%.

V. Main Conclusion and Policy Suggestions • Straighten out relationships between rights and obligations of each parties • Adjust and arrange scope and schedule of nosmoking at public places, according to assignment of rights and obligations • Develop tools for enforcement, and improve efficiency so as to achieve the goal

提供公共服务的场所 Requirements for Enforcement Differ upon 医疗机构 80 幼儿园托儿 Different Place Categories 所 60 中小学校 40 20 R 2 = 0. 5534 0 -20 -40 0 车站机场 10 室内等候区 20 30 40 满足个人需求的场所检查力度 40 20 禁烟效果 100 0 -20 -40 -60 -80 0 大型商场健身体育场馆培训机构 50 大型餐馆宾馆酒店小商店 100 R 2 = 0. 7526 检查力度小餐馆 150

Figure 3 Analysis and Thoughts about 100 Supervision Model of Enforcement 执法机构抽查力度与禁烟效果医疗机构 80 幼儿园托儿所 60 中小学校大型商场超市禁烟效果 40 20 0 -20 -40 0 20 公共交通具 40 60 80 100 小商店网吧 -60 -80 R 2 = 0. 7518 抽查力度 120

Suggestions • • • Re-clarification of rights and obligations: explicitly inform no-smoking obligations to obliged institutions and clarify legal responsibility its borne, in accordance with different categories of public places. Supervise formulation of corresponding internal no-smoking management plan by obliged institutions within jurisdictional area, and inspect the implementation of no-smoking responsibility have been applied to specific staff. Adjust no-smoking schedule according to public places of different categories: allow for certain smoking rate to public places which aim at satisfying personal demands in short-term. As for these places, internal no-smoking regime should explicitly set up plan for smoking area and smoking room, and methods for examination and maintenance. Adjust enforcement ways flexibly : law enforcement agencies at primary level, such as District Office, should examine implementation work of plan by obliged institutions within jurisdictional area. Further develop rating work of no-smoking at public places, connect no-smoking work of each institutions and public places together with sanitation inspection, and update ranks periodically according to no-smoking works of obliged institutions. At the same time, advocate no-smoking ranking of each institution to the public, so as to improve public awareness of meaning of different ranking level. Places which done bad no-smoking work shall be categorized into lower sanitation grade, and shall be upgraded when its no-smoking work return to normal. Commend public places which is to satisfy individual demands for their excellent work of implementing no-smoking obligations, in particular to restaurants, and establish their public image. On the other hand, launch report system, so as to carry out supervision by peer competitor and consumers.

Thank you

Cost-Benefit-Analysis of No-smoking Policy Instruments—Case Study of Beijing