Does tobacco expenditure influence household spending
patterns in Ghana?: Evidence from the Ghana 2012/2013
Living Standards Survey

Masa-ud, Abdul Gafar A.; Chelwa, Grieve; Walbeek, Corné van

doi:10.18332/tid/120936

Cited by 6 publications

(7 citation statements)

References 20 publications

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“…The results confirm that tobacco consumption sacrifices the resources on necessities, while benefiting other non-healthy consumption. Similar to the previous studies in LMICs, this study shows that tobacco spending crowds out the resources on clothing, housing and education 3 6 7 10 13 15 18. Considering food categories, households with smokers compared with those without smokers spend less on cereals, dairy products (other than milk) and fruits and vegetables.…”

Section: Discussionsupporting

confidence: 84%

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Impact of tobacco spending on intrahousehold resource allocation in Montenegro

2023

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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 uses the Household Budget Survey data from 2005 to 2017 to estimate a system of Engel curves using a three-stage least squares approach. As the tobacco expenditure variable is endogenous to budget shares on other consumption items, instrumental variables were included to obtain consistent estimates.ResultsOverall, the results confirm the existence of the crowding out effect of tobacco spending on various commodities, such as some food items (eg, cereals, fruits and vegetables and dairy products), clothing, housing and utilities, education and recreation while a positive effect of tobacco consumption was estimated on budget shares on bars and restaurants, alcohol, coffee and sugary drinks. These results are consistent throughout the income groups of households. The estimates indicate that an increase in tobacco expenditures leads to reduction in budget shares on essential goods, which is likely to have negative impacts on the household living standard.ConclusionsTobacco expenditure crowds out household spending on necessities, especially in case of the poorest households, thus increasing inequality, hampering human capital development and potentially causing long-term adverse effects on the households in Montenegro. Our results are similar to evidence from other low and middle-income countries. This paper contributes to the analysis of the crowding out effect of tobacco consumption, which was conducted for the first time in Montenegro.

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Section: Discussionsupporting

confidence: 84%

“…Since the first studies in the early 2000s,1 2 research especially from low and middle-income countries (LMIC) analysed the crowding out effect of spending on tobacco and consistently found evidence that this effect negatively affected spending on mainly basic necessities 3–22…”

Section: Introductionmentioning

confidence: 99%

Impact of tobacco spending on intrahousehold resource allocation in Montenegro

2023

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“…In cases where both endogeneity and heteroscedasticity problems arose, authors use GMM-3SLS (Masa et al, 2020;Nguyen & Nguyen 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

“…On the other hand, Pu et al (2008) found that low-income households are most vulnerable since they are more affected in terms of food and health. John et al (2011) For some studies, the most affected categories were food, health, and education (Wang et al, 2006;San & Chaloupka, 2015;Masa et al, 2020), but in some cases, the crowding-out also occurred in categories such as recreation, transportation, communication, housing, clothing, and financial security (Wang et al, 2006;Husain et al, 2018;Masa et al, 2020). However, a crowding-in effect is also possible, as Husain et al (2018) found; this crowding-in was in food and health, while others found it in alcohol (Masa et al, 2020;Nguyen & Nguyen, 2020;Paraje & Araya, 2017;Wang et al, 2006).…”

Section: Literature Reviewmentioning

confidence: 99%

Tobacco consumption influence on spending patterns within Costa Rican households

Sequeira Benavides

2023

PSM

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Tobacco consumption implies a dilemma in the allocation of the family budget. Hence, the objective of this study is to determine the effect of tobacco consumption on expenditure patterns within Costa Rican households. The 2018 National Household Income and Expenditure Survey is used to estimate Engel curves through a Quadratic Almost Ideal Demand System, using the Seemingly Unrelated Regression model for a set of 11 expenditure categories. Due to heteroskedasticity and endogeneity, the Generalized Method of Moment Three-Stage-Least-Squares (GMM-3SLS) is used since it provides more efficient parameter estimates. Results show that tobacco consumption is associated with a crowding-out effect on health expenditure and with a crowding-in effect on restaurant and hotel expenditures. Furthermore, tobacco consumption shows a crowding-in effect on alcoholic beverages for every income quintile. This suggests that tobacco consumption could harm the country´s standard of living and not only the realm of health.

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“…2 In particular, as regards the interaction between tobacco taxation and population health, using death rate as the health indicator is very important because, the negative health effects of smoking go beyond smoking‐related deaths (Immurana et al, 2020). This is because, the consumption of tobacco can reduce household spending on shelter, food and health (Masa‐Ud et al, 2020; Paraje & Araya, 2018; WHO, 2021), which can have deleterious effects on the health of the entire population (Immurana et al, 2020). Descriptive statistics of the variables can be seen in Table 1.…”

Section: Model Specification Data and Estimation Strategymentioning

confidence: 99%

An empirical analysis of the effect of tobacco taxation on economic growth in 38 African countries

Immurana

Boachie

Dalaba

et al. 2021

J of Intl Development

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Globally, tobacco use claims millions of lives every year. This has necessitated policy responses including tax measures aimed at reducing the consumption of tobacco. Nonetheless, opponents of tobacco taxation posit that, it may hurt economic growth. This study, therefore, examines the effect of tobacco taxation on economic growth in 38 African countries from 2008 to 2018. The system generalised method of moments (GMM) regression is used as the estimation technique. The findings show that, tobacco taxation enhances economic growth both in the short‐ and long‐run periods, especially, through its effect on population health. Thus, African governments should be confident when increasing tobacco tax because, it has an added advantage of propelling economic growth.

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Does tobacco expenditure influence household spending patterns in Ghana?: Evidence from the Ghana 2012/2013 Living Standards Survey

Cited by 6 publications

References 20 publications

Impact of tobacco spending on intrahousehold resource allocation in Montenegro

Impact of tobacco spending on intrahousehold resource allocation in Montenegro

Tobacco consumption influence on spending patterns within Costa Rican households

An empirical analysis of the effect of tobacco taxation on economic growth in 38 African countries

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