Stat of the week

I think I've found a winner for the next StatsChat "Stat of the Week" competition. Auckland University's Statistics Department gives a weekly prize for the best or the worst journalistic use of statistics. This is another submission on the bad side.

The Christchurch Press runs a story by Jason Krupp arguing that tobacco costs the New Zealand public health system $7 billion per year.

According to the World Health Organisation's Economics of Tobacco Toolkit, health costs attributed to smoking account for between 6 per cent and 15 per cent of national healthcare expenditure in developed countries.

In Australia, smoking costs equated to between 2.1 per cent and 3.4 per cent of gross domestic product.

New Zealand was not featured in the report but, if the results were comparable here, it would mean Kiwi taxpayers fork out about $7 billion a year to treat smoking-related diseases.

That number seems very high. Recall that New Zealand is a country of about 4.4 million people. Is it any way plausible that each and every one of us are shelling out about $1600 per year to cover smoking-related illness? That's the first thing that a numerate journalist should have thought about: a sense of scale.

Next plausibility check: how much does the government spend on the health system in total? Treasury's site is down again and so I'll have to trust in this infographic; it's from Keith Ng, so it's almost certainly correct. It cites numbers of $13.2 billion for 2011 and $13.9 billion for 2012. Does it seem plausible that smoking accounts for half of total government health expenditures? That we could double health services but for the existence of smokers?

Numbers that far out of whack demand a bit of fact checking. What would five minutes on Google tell you about prior estimates of the costs borne by the New Zealand Health System? You'd probably find the Ministry of Health's $1.9 billion estimate, but that one was predicated on the assumption that smokers would otherwise live forever with zero health costs: they didn't account for that smokers do eventually have to die, even if they don't smoke, and so most of the health costs of smoking are just bringing forward costs that would otherwise be borne by the health system even if smoking had never existed. Here's a piece from the Christchurch Press noting, and critiquing, that MoH estimate.

Next, you'd find the study by Des O'Dea, commissioned by Action on Smoking and Health, and by the SmokeFree Coalition, that concluded that smokers cost the health system some $350 million in 2005: 5% of the figure cited by Krupp. Inflation hasn't been that high over the last 7 years. O'Dea cites total figures including smokers' spending on tobacco and a bunch of other costs properly viewed as privately borne that amount to $1.7 billion: still rather smaller than Krupp's figure even though in includes a really broad assortment of costs other than those falling on the government.

And, you might find the New Zealand Cancer Society saying the total cost borne by the health system is $250 million.

And we'd also want to remember that smokers pay about a billion dollars a year in excise taxes.

I really hope that Krupp isn't based at the Press and is just part of the Fairfax stable. Because I gave a talk at The Press last year that I'd hoped would cure them of this particular kind of innumeracy.

Is it too much to ask that the Fairfax papers not invent statistics that leave their readers worse-informed for having bought their newspapers?