Crowding-out effect of tobacco expenditure and its implications on intra-household resource allocation
AbstractThe aim of this paper is to examine if tobacco consumption crowds-out consumption of basic needs and whether it has implications for nutrition intake and intra-household resource allocation in developing countries. In the process we also examine whether preference over other commodities for tobacco users and non users vary significantly. Using a nationally representative household sample survey from India for the year 1999-2000, we analyze the pattern of spending on various groups of commodities by the status of tobacco consumption of households. Average per capita per diem intake of nutrients such as calorie, fat and protein were reported to be lower among the high tobacco spending group of households vis-`a-vis the no-spending category. A system of quadratic conditional Engel curves was estimated for a set of ten broad groups of commodities. Separability between tobacco and most other goods was rejected. The results suggest that tobacco consuming households had lower consumption of certain commodities such as milk, clean fuels and entertainment which has direct bearing on mostly children and female members in the household suggesting possible `gender effects' and biases in intra-household resource allocation. Tobacco spending also found to have negative effects on household nutrition intake.
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Bibliographic InfoPaper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2006-002.
Length: 29 pages
Date of creation: Mar 2006
Date of revision:
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tobacco; consumption; poverty; crowd-out; India;
Other versions of this item:
- Rijo M John, 2006. "Crowding-out Effect of Tobacco Expenditure And Its Implications on Intra-Household Resource Allocation," Microeconomics Working Papers 22396, East Asian Bureau of Economic Research.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
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