(MONEY Magazine) – Roughly 70% of the $2 billion that Americans will spend this year on home insulation -- $200 million of it by do-it-yourselfers -- will go for rolls of pink fiberglass made by the top cat of warm and snug, Owens-Corning. Of course, its pink stuff is pitched by none other than the Pink Panther. But if you're in the housewarming market this year, there's a better alternative: cellulose insulation. It's not only painless to install and more efficient but, best of all, is cheaper than fiberglass. As any weekend handyman can tell you, working with fiberglass can mean enough ouch to send even the hardiest potato back to the couch. Made primarily from blown glass and formaldehyde, the prickly glass fibers are abrasive to the skin and can trigger serious respiratory problems if inhaled. And this past July, fiberglass was added to the Department of Health and Human Services' list of suspected carcinogens. For its part, Owens-Corning steadfastly maintains that fiberglass insulation poses no serious health risk. Says Brad Oelman, vice president of corporate relations for the $3 billion Toledo company: "We remain confident about the safety of our product." And Dan Larson, a spokesman for the North American Insulation Manufacturers Association, an industry trade group, concedes only that "installing and breathing the stuff are the fears." By contrast, cellulose insulation is nonabrasive, contains no suspected carcinogens and is environmentally friendly. In fact, cellulose was the dominant home insulation in the U.S. before fiberglass came into vogue more than 30 years ago. The leading brand, Louisiana Pacific's Nature Guard, is manufactured primarily from recycled newspaper that is treated with borax and boric acid. Other cellulose brands, like Suncoast's U.S. Fiber, are similarly produced from old newspapers. Cellulose is more economical than fiberglass partly because it is more efficient, nearly 50% better than fiberglass at keeping your house warm. Moreover, because cellulose is blown into attic ceilings, walls and floors (with an easy-to-use machine that most sellers provide free of charge), it reaches nooks and crannies that otherwise go uninsulated. "With fiberglass you get a lot of missed space," says Elgon Williams, manager of the building materials department at Home Depot in North Haven, Conn. As for the cost of materials, cellulose wins again. To cover the typical 1,000-square-foot attic space to the recommended thickness of R-30 (which means the heat resistance is 30 times greater than an uninsulated space), you would need to buy around 35 of the 50-square-foot Nature Guard bags. Your total cost: $245. For 1,000 square feet of Owens-Corning's precut R-30 strips, you would spend nearly 40% more, or about $340. That difference could buy the Pink Panther some tasty cat food.