Tobacco Expenditure Research Articles

Crowding-out effect of tobacco consumption on household food expenditures in Cameroon

This study delves into the critical issue of household budgets in Cameroon, specifically focusing on the impact of tobacco expenditure. Tobacco use often represents a significant portion of a household’s financial resources, potentially leading to a phenomenon known as the “crowding-out effect.” This effect describes a situation where increased tobacco spending leads to a decrease in the budget allocated to other essential goods and services. To gain a deeper understanding of this phenomenon, this study employs a quantitative approach. The analysis utilizes data from a nationally representative household survey conducted in Cameroon during 2014 (ECAM4). A two-stage least squares (2SLS) technique is implemented to address a potential statistical issue known as endogeneity, which could otherwise skew the results. The study’s findings reveal a concerning trend: tobacco expenditure has a negative impact on the budget shares allocated to essential goods such as food, clothing, and household equipment. This negative impact appears to be particularly pronounced for male consumers within households. Based on these findings, the study suggested that implementing tobacco control policies could lead to significant improvements in household well-being and overall health status. These policies, by encouraging a reduction in tobacco use, could free up resources that could then be reallocated towards essential goods, ultimately improving household financial stability and health outcomes.

SMOKING PREVALENCE AMONG DRIVERS OF DHAKA CITY:

Smoking is an increasingly prevalent habit in Bangladesh, particularly among men with low socio-economic status. Tobacco expenditures exacerbate the effects of poverty and cause significant deterioration in living standards among the poor Bangladeshi people. A cross sectional study was carried out from 15th to 26th March, 2013 to determine the prevalence, pattern, socio-economic impact of smoking among bus drivers of Dhaka city. The prevalence of cigarette smoking was 93% and 20% of total income was spent on cigarettes indicating more than twice as much as per capita expenditure on food, clothing, housing, health and education combined, resulting in illiterate, malnourished household members. Though most (32.3%) of the drivers started smoking before involving in driving profession, excessive smoking was promoted by occupational and environmental stress experiencing hectic work schedule. Tobacco can also worsen poverty among users and their families since most of the drivers reported heart disease (26.9%) and other health complications caused by smoking, depriving families of much-needed income and imposing additional costs of health care. Around 70% smokers wished to quit smoking considering its detrimental effect but unknown of quitting strategy. Interventions and preventions by policy makers, public health experts and other stakeholders should be introduced because smoking was more prevalent among bus drivers with detrimental health sequel.

Dangerous But Consumed: Drivers of Tobacco and Alcohol Expenditure and Their Implications on Healthcare Costs and Food Poverty in Tanzania

Dangerous But Consumed: Drivers of Tobacco and Alcohol Expenditure and Their Implications on Healthcare Costs and Food Poverty in Tanzania

The impact of tobacco tax increases on cost-minimising behaviours and subsequent smoking cessation in Australia: an analysis of the International Tobacco Control Policy Evaluation Project

ObjectiveWe examined the relationship in Australia from 2007 to 2020 between tobacco tax increases and use of cost-minimising behaviours (CMBs) when purchasing tobacco and: (1) tobacco expenditure and (2) smoking...

Distributional Impacts of Tobacco Excise Taxes in Serbia.

Numerous studies worldwide have investigated the impact of tobacco tax increase on household welfare, focusing on concerns regarding potential tobacco taxation regressivity and its effects on the poorest, whereas their scope was limited to the working population. To explore the effects of tax changes on household budgets, accounting for the retired population as well, we employed the modified Extended Cost-Benefit Analysis (ECBA) framework, assuming a 43.6% specific tax increase that fits the EU Tobacco Tax Directive recommendation of minimum EUR 90 excise taxes per 1,000 cigarettes. Our analysis encompassed changes in: 1) tobacco expenditure (accounting for price elasticities by income groups: low-, middle-, and high-income), 2) medical costs linked to smoking-related diseases (utilizing relative risk of morbidity/mortality and smoking-attributable fractions), 3) years of working life (considering the years of working life lost among the working population), and 4) years of pension receipt (accounting for the years of retirement life lost due the premature death). Under an assumed specific excise increase leading to a 22.4% retail tobacco price rise, the net gains in disposable household budgets would be 0.01% for high-income, 1.3% for middle-income, and 2.9% for low-income households. A tax increase would yield a progressive effect on income distribution, benefiting the most economically disadvantaged population thereby contributing to a more equitable income distribution. To effectively reduce tobacco consumption, subsequent smoking-related medical costs, and associated productivity and pension losses, it is recommended that Serbia implement a minimum 43.6% increase in the specific tobacco excise tax.

A Study on the Measurement of Relative Poverty in Developing Countries with Large Populations

Under the goal of global poverty eradication, it has become a forward-looking research aim to establish relative poverty criteria and identify people experiencing relative poverty in countries with different demographic characteristics. This paper introduces a new method to measure the relative poverty standard, which is to use the fuzzy decision tree algorithm to objectively estimate the relative poverty standard. The advantage of this algorithm lies in (1) it not only maintaining the regression idea of measuring absolute poverty, but also emphasizing the nonlinearity when the demand is increasing, which can reflect the change in human needs. (2) It overcomes the division of the traditional method which clearly distinguishes between those experiencing poverty and those who are not by means of a subjective threshold, and it also avoids the subjectivity of the selection of multidimensional indicators. (3) It overcomes the problems of data skewness and extreme value issues that traditional methods have, and can exhibit multi-dimensional characteristics. (4) Most importantly, this method can overcome the gap problem caused by the complex population structure in developing countries with huge populations, and is more adaptable under big data conditions than traditional methods. Taking China as an example, using data from the China Household Finance Survey for validation, the validation results show that the relative poverty standard in China in 2019 can be approximately delineated as 5288.5 RMB; this result is higher than the absolute poverty standard line delineated in China in that year, lower than the relative poverty standard line measured using the proportion method, and it can satisfy the average per capita food, tobacco, and alcohol consumption expenditure of Chinese residents in that year. Thus, compared with other methods, the fuzzy decision tree algorithm can better match the identification of relative poverty in developing countries with large populations.

A Quantitative Exploration of the Influence of Tobacco Use on Poverty in India

Abstract Introduction Tobacco use has a disproportionate impact on lower socioeconomic groups in India. The study quantifies the number of people who would fall under the national poverty line if the direct spending on tobacco and healthcare expenditures attributable to tobacco use were subtracted from their monthly expenditures. It also aims to estimate the extent to which tobacco use increases the probability of poverty status in India. Aims and Methods We quantify the increase in poverty by multiplying the difference between headcount ratios with and without tobacco-related spending by population size. We use propensity score matching to estimate the extent to which tobacco use increases the probability of poverty. Results About 18.4 million (1.5% of all Indians) are pushed into poverty due to either direct tobacco-related expenditures or tobacco-related healthcare spending. Tobacco use increases households’ likelihood of being poor by 3.4%–3.7%. Conclusions With over 22% of the global poor, achieving poverty reduction goals is a significant challenge for India. We show that this challenge is accentuated by increased tobacco spending, which pushes millions of Indians into poverty. To address this, the Government of India must implement both fiscal and non-fiscal policies that regulate tobacco use and, in turn, contribute to poverty reduction in the country. Implications Tobacco use has a disproportionate impact on lower socioeconomic groups in India, leading to increased and deeper poverty. This paper finds that, based on existing proven measures of poverty, tobacco use accounts for an additional 18.4 million poor individuals. It also shows that tobacco use increases the likelihood of a household being classified as poor by 3.4% to 3.7%. As India is home to a significant proportion of the global poor, addressing tobacco use becomes crucial for global and domestic poverty reduction goals. Fiscal and non-fiscal policies can be used to regulate tobacco and potentially reduce poverty levels in India.

Impact of tobacco spending on intrahousehold resource allocation in Montenegro

BackgroundThe main goal of this study is to estimate the crowding out impact of tobacco expenditures on the household budget allocation to other mutually exclusive commodity groups in Montenegro.MethodologyThe analysis...

Crowding-out effect of tobacco consumption in Indonesia

BackgroundTobacco consumption is pervasive in Indonesia, with 6 out of 10 households in the country consuming tobacco. Smoking households, on average, divert a significant share (10.7%) of their monthly budget...

Crowding-out effect of tobacco consumption in Serbia

BackgroundAlthough smoking prevalence and intensity in Serbia have decreased in recent years, expenditures on tobacco products still represent a significant portion of household budgets. As households have limited resources at...

Inequality of the crowding-out effect of tobacco expenditure in Colombia.

In recent decades, policy initiatives involving increases in the tobacco tax have increased pressure on budget allocations in poor households. In this study, we examine this issue in the context of the expansion of the social welfare state that has taken place over the last two decades in several emerging economies. This study explores the case of Colombia between 1997 and 2011. In this period, the budget share of the poorest expenditure quintile devoted to tobacco products of smokers' households doubled. We analyse the differences between the poorest and richest quintiles concerning the changes in budget shares, fixing a reference population over time to avoid demographic composition confounders. We find no evidence of crowding-out of education or healthcare expenditures. This is likely to be the result of free universal access to health insurance and basic education for the poor. For higher-income households, tobacco crowds out expenditures on entertainment, leisure activities, and luxury expenditures. This finding should reassure policymakers who are keen to impose tobacco taxes as an element of their public health policy.

The Impoverishing Effect of Tobacco Use in Indonesia.

Smoking households in Indonesia diverted a significant share of their budget to tobacco. Tobacco expenditure is deemed unproductive, as it crowds out resources from essential commodities and increases health care expenditure driven by tobacco-induced diseases. Therefore, despite having adequate resources, some smoking families in Indonesia may spend less on basic needs, which inadvertently puts their standard of living below the poverty line. Employing data from 2021 (March) Indonesia's Socioeconomic Survey (SUSENAS), this research aims to quantify the impoverishing effect of tobacco consumption in Indonesia, considering spending on tobacco and tobacco-attributable health care costs as unproductive expenditure. The de facto headcount poverty rate and poverty gap index are calculated by removing tobacco expenditures and tobacco-attributable health care expenditures from the household's total spending. Accounting for unproductive spending related to tobacco use, Indonesia's headcount poverty ratio in March 2021 would rise by 3.22 percentage points, equivalent to an additional 8.75 million people living below the poverty line. In addition, the poverty gap index would increase by 0.77 percentage points. The impoverishment effect of tobacco is larger among rural populations than their urban counterparts. Moreover, the impoverishment is mainly driven by direct tobacco spending rather than tobacco-attributable health care expenditure. Significant portions of Indonesia's population are exposed to secondary poverty due to tobacco use. A high level of cigarette spending among smoking households is the major source of the impoverishing effect of tobacco use. The study provides quantitative evidence of the true cost of smoking in Indonesia, where the de facto number of the poor population after accounting for tobacco-related spending is higher than what is published in the official statistics. The findings of this study support tobacco control policies in Indonesia, particularly to effectively reduce tobacco use and mitigate the impoverishing impact of tobacco use on low-income households.

Potential smoke-free dividend across local areas in England: a cross-sectional analysis

BackgroundThe value that might be added to local economies each year through the money that people who smoke tobacco would save if everyone quit smoking is called the ‘smoke-free dividend’....

The Crowding-out Effect of Tobacco Expenditure on Health Expenditure: Evidence From a Lower-Middle-Income Country.

Poor people have remarkably lower health expenditures than rich people in Vietnam. According to the 2016 Vietnam Household Living Standard Survey (VHLSS), per capita health expenditure of the top quintile households is around 6 times higher than that of the bottom quintile households. We analyze economic inequalities in health expenditure using the concentration index approach and data from the VHLSS 2010-2016. Next, we use the instrumental-variable regression analysis to examine the crowding-out effect of tobacco expenditure on health expenditure. Finally, we use decomposition analysis to explore whether economic inequality in tobacco expenditure is associated with an economic inequality in health expenditure. We find a crowding-out effect of tobacco expenditure on health expenditure of households. The share of health expenditure of households with tobacco spending is 0.78% lower than that of households without tobacco spending. It is estimated that a one-VND increase in tobacco expenditure results in a 0.18 Vietnamese Dong (VND) (95% CI: -0.30 to -0.06) decrease in health expenditure. There is a negative association between economic inequality in tobacco expenditure and economic inequality in health expenditure. This means that if the poor consume less tobacco, their expenditure on health can be increased, resulting in a decrease in inequality in health expenditure. Findings from this study suggest that reducing tobacco expenditure could improve health care of the poor and reduce inequality in health care in Vietnam. Our study recommends that the government continuously increase the tobacco tax in order to effectively reduce tobacco consumption. Empirical studies show mixed results on the effect of tobacco expenditure on health expenditure. We find a crowding-out effect of tobacco expenditure on health expenditure of poor households in Vietnam. It implies that if the poor reduce their expenditure on tobacco, economic inequality in health expenditure can be reduced. Our findings suggest that reducing tobacco consumption in poor households can increase their health expenditure, therefore, decreasing inequality in health expenditure. Different policies to reduce tobacco consumption such as tobacco taxation, smoke-free areas, and tobacco advertisement bans should be strengthened.

The Effects of Inequality on the Substitution of Essential Goods for Tobacco Smoking in South Africa

Tobacco consumption contributes to a substantial amount of household expenditures, which might lead to decreased spending on other essentials. This study examines household head tobacco expenditures in various inequality settings. In this study, we investigated the impact of gender, race, and educational inequality and the substitution effect of tobacco expenditure on essentials such as children’s education and household food. We looked at how much of the resources household heads spend on tobacco in different inequality settings that replace households’ essentials. The panel setting of the National Income Dynamics Study (NIDS), South Africa’s first nationally representative household panel survey, is used as a data collection source for this study. These are household surveys conducted by the Presidency’s Office of Planning, Monitoring, and Evaluation. The panel data are subject to attrition in longitudinal research. We compared the conditional expenditure shares of various types of households using econometric models such as moment quantile regression. A negative and statistically significant estimated coefficient of tobacco expenditure and the coefficient of the interacted term (inequality and tobacco expenditure) demonstrated the substitution effect. The findings reveal that low-income households whose heads smoke tobacco invest less in their children’s education, while well-educated heads of high-income households’ place as much value on their children’s education as they do on cigarette expenditure. The study also points out that the share of income spent on cigarettes by black household heads is negatively connected to their children’s education across all quantiles compared to non-blacks. We conclude that low-income households are more likely to experience the substitution impact than high-income households. This study recommends, among other things, that low-income households should prioritize needs over non-essentials in order to maximize household satisfaction, and government should implement policies that will limit tobacco consumption expenditure.

Smokers’ strategies to reduce tobacco spending: self-reported use and differences across subgroups. Findings from the International Tobacco Control (ITC) Netherlands Survey

BackgroundThe cost of tobacco is one of the most reported reasons for smoking cessation. Rather than quitting, smokers can use also strategies to reduce tobacco expenditure while continuing smoking, such as smoking less or using price-minimising strategies. The Netherlands announced to increase the price of a pack cigarettes from seven (2018) to ten euros (2023), to reduce tobacco prevalence and consumption. This study explores the self-reported strategies to reduce tobacco spending among Dutch smokers, and whether this differed per age, income, and education. Additionally, we analysed among quitters in these subgroups whether price played a role in their decision to quit.MethodsCross-sectional survey data from the International Tobacco Control (ITC) Netherlands Wave 2 (September–November 2020, N = 1915) was used. Strategies to reduce spending among smokers (N = 1790) were: reducing consumption, bulk buying, switching to cheaper products or buying from low-taxed sources. These were collapsed into: reducing consumption (solely or in combination with other behaviours), solely price-minimising behaviours (such as buying cheaper brands), or no strategies to reduce spending. Associations between strategies and characteristics were analysed through multinomial and binary logistic regression models. Second, we explored which subgroups were more likely to report that price played a role in their decision to quit among quitters (N = 125).ResultsThe majority of smokers used strategies to reduce tobacco spending: 35.6% reduced consumption and 19.3% used solely price-minimising strategies. 82.1% of quitters reported that price played a role in their decision to quit. Low-income individuals were more likely to report price as a reason for quitting and reduce consumption, but also to buy cheaper products. Highly nicotine dependent smokers were more likely to use price-minimising behaviours, and less likely to reduce consumption.ConclusionsThe majority reported using strategies to reduce spending or that price played a role in their decision to quit. Reducing consumption was the most reported strategy. Low-income smokers were more likely to reportedly reduce consumption, buy cheaper products, or quit. Price policies have the potential to reduce socioeconomic inequalities in smoking. To discourage price-minimising behaviours, such as switching to cheaper products, reducing price differences between products should be prioritized.

IV methods for Tobit models

This paper studies models of processes generating censored outcomes with endogenous explanatory variables and instrumental variable restrictions. Tobit-type left censoring at zero is the primary focus in the exposition. Extension to stochastic censoring is sketched. The models do not specify the process determining endogenous explanatory variables and they do not embody restrictions justifying control function approaches. Consequently, they can be partially or point identifying. Identified sets are characterized and it is shown how inference can be performed on scalar functions of partially identified parameters when exogenous variables have rich support. In an application using data on UK household tobacco expenditures inference is conducted on the coefficient of an endogenous total expenditure variable with and without a Gaussian distributional restriction on the unobservable and compared with the results obtained using a point identifying complete triangular model.

Role of Health Insurance in Facing Health Expenditures Among Urban Female-headed Households in Iran

Background: Health insurance is one of the important parts of financing in the health system to reduce inequality in household health expenditures. Objectives: This study aimed to investigate the role of health insurance in facing health expenditures among urban female-headed households in Iran. Methods: This descriptive-analytical applied study was performed cross-sectionally using the double-sample selection econometrics method in Stata software (version 16) in 2021. The sample included 2645 female-headed households, and the data were prepared by the Statistics Center of Iran using a questionnaire. Results: The results showed that social security insurance, private insurance, and insurance of special organizations led to an increase in the health expenditures of female-headed households by 159896, 334137, and 18332 Rials, respectively. Increasing household size, having children, having an elderly person, increasing per capita income, and per capita tobacco expenditures led to an increase in the health expenditures of female-headed households by 875260, 1545153, 2441094, 0.32, and 1.65 Rials, respectively. Conclusions: Private insurance, social security insurance, and insurance of special organizations had the greatest impact on increasing the health expenditures of female-headed households, respectively. Therefore, it is necessary to create an integrated health insurance system that reduces insurance organizations and funds and provides the same level of coverage for health goods and services. It is also suggested to adopt policies to increase the educational level of female-headed households to reduce health expenditures.

Harmonization of State E-cigarette and Cigarette Excise Taxes: Association with U.S. State Tobacco Control Interventions

Introduction Excise taxes have proved to be a powerful mechanism to lower demand for tobacco products. The purpose of this study was to summarize current combusted and e-cigarette excise taxes by state, and assess whether harmonization of combusted cigarette and e-cigarette excise taxes is more likely to occur in states comprehensive tobacco control approaches. Methods We compiled excise tax data on e-liquids (whether the state had any e-cigarette excise taxes) and cigarettes (percent of excise tax of total price in dollars per pack of 20) as of September 2022 for all states and the District of Columbia. We derived an index of combusted cigarette/e-cigarette harmonization by classifying excise tax proportion for cigarettes by median split (1/0), and whether a state had any e-cigarette excise tax (1/0). Harmonization was observed when the top (1/1) or bottom (0/0) matched. We used analysis of variance to determine whether the harmonization of cigarette/e-liquid excise taxes differed according to states’ adoption of tobacco control policies and expenditure on tobacco prevention. Results Twenty states did not apply any excise tax on e-liquids. States with harmonized, high excise taxes had the highest mean sum of tobacco control laws (M=4.4, SD=1.2) and the highest mean percent spending on prevention of the CDC recommendation (26.4%). We observed significant differences in the total number of laws (p=0.001), but not percent of tobacco prevention spending, across harmonization categories. Discussion The adoption of harmonized, high excise tax rates for combusted cigarettes and e-cigarettes is consistent with best-practice approaches for state-level tobacco control policy. However, few states have implemented high, harmonized tobacco product excise taxes, highlighting a substantial opportunity in tobacco control policy. Conclusion These findings may inform the development of U.S. federal policy on e-cigarette excise taxes, as well as support bills that aim to equalize tax rates across tobacco products.

Financial challenges and hardship during the COVID-19 pandemic and tobacco expenditure minimizing strategies among U.S. adult commercial tobacco users

IntroductionCommercial tobacco (CT) users employ tobacco expenditure minimizing strategies (TEMS) to manage their CT expenditures. We examined how financial challenges and hardships during the COVID-19 pandemic relate to increases in TEMS use. MethodsData from a nationally representative sample of 1,700 U.S. adult recent former and current CT users were collected from an online panel during January–February 2021. Participants reported if they had increased use of eight TEMS to save money on CT since the pandemic, and experienced financial challenges (e.g., losing a job) and hardships (e.g., not having enough money to pay for food). The number of financial hardships experienced was counted (range: 0–6). Weighted multivariable logistic regression models were used to examine the associations between financial challenges and hardships and increased TEMS use, adjusting for demographics. ResultsSince the COVID-19 pandemic, three TEMS showed the largest increase in use by U.S. adult current and recent former CT users: cutting back (22.4%), finding less expensive places to purchase (15.6%), and buying by bulk (15.5%). Many financial challenges and hardships were consistently associated with increased uses of TEMS. Furthermore, every additional count of financial hardships was associated with higher odds of increasing use of each TEMS (AORs ranging between 1.12 and 1.23). ConclusionsMany CT users increased TEMS use to manage their CT expenditures when facing financial challenges and hardships during the pandemic. This could hinder CT cessation and promote relapse. Prohibiting certain TEMS (e.g., discount coupon and price promotions) may promote CT cessation among this financially vulnerable group.