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Impact Assessment of New York State's Cigarette Fire Safety Performance Standard.


pdf icon Impact Assessment of New York State's Cigarette Fire Safety Performance Standard. (893 K)
Ruegg, R.; Petraglia, L.

NIST GCR 05-882; 222 p. December 2005.

Sponsor:

National Institute of Standards and Technology, Gaithersburg, MD

Keywords:

cigarettes; fire safety; standards; impact; economic impacts; low-ignition cigarettes; residential buildings; uncertainity; scenarios; ignition; legislation; sensitivity analysis

Abstract:

New York State is the first state in the nation to pass legislation aimed at reducing the cigarette fire problem by setting a standard requiring all cigarettes sold in the State to have a reduced risk of accidentally igniting household furnishings. The goal of this study is to develop a methodology to assess the impacts of cigarette fire safety standards and to present results for a base case and for alternative scenarios to shed light on possible impacts of the standard within the State. It estimates first-order impacts, defined as the direct human costs of residential fires caused by cigarettes, including number of deaths and injuries, and value of fire property damage. It also estimates second-order impacts, defined as State-wide economic effects of reduced fire losses, and State-wide economic effects that may result from price- or preference-driven shifts in cigarette purchases, including impacts on in-State businesses, and changes in State-wide expenditures, income, jobs, and excise tax revenues. The study uses a benefit-cost methodology as an organizing framework for the impact assessment and the Regional Economic Models, Inc. (REMI) forecasting model for NY State to estimate second-order economic impacts. The study projects residential fire losses due to cigarette-caused fires in NY State over a six-year period of analysis at approximately 180 deaths, 1,460 injuries, and $80 million in direct property losses. These are the projected losses the standard seeks to avoid. A complicating factor is that existing tax-related diversion of cigarettes to out-of-state channels may possibly lower the ability of the standard to reduce losses. However, if manufacturers produce cigarettes that comply with or exceed the standard's requirements, that are acceptable to smokers, and that are priced in line with non-complying cigarettes, the standard is positioned to generate net benefits. If producers increase prices of complying cigarettes or if smokers are dissatisfied, diversion of cigarettes to non-complying channels could increase, and these developments would be expected to reduce fire-loss avoidance and generate negative impacts on business sales and State excise tax. The study assumes that the standard will not change smoking health effects because compliant cigarettes are believed to have about the same smoking-related toxicity effects as non-compliant cigarettes, and it is assumed that any price- or preference-driven reductions in the consumption of compliant cigarettes will be offset by shifts to purchases of non-compliant cigarettes through channels not regulated by the State. Reflecting uncertainties, the study presents projected impact estimates for a number of alternative, hypothetical scenarios. The methodology may be useful to other states for use in assessing potential impacts of cigarette fire safety standards.