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Does tobacco spending crowd-out the household budget? Preliminary results using nationwide survey data

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  • Kostakis, Ioannis

Abstract

The aim of this paper is to examine the crowding out effect of tobacco spending on other household commodity groups. It uses a national representative household sample survey retrieved from Hellenic Statistical Authority for the year 2017. A system of conditional Engel curve formula was estimated for a set of 12 commodity groups based on Eurostat categorization. Results reveal that spending on tobacco leads to a household budget allocation having a negative effect on certain commodity groups such as food, clothes, health and durables and positive on communication, education and spending on hotels and restaurants. Policy implications suggest that a regressive policy recommendation that result a cut tobacco effect could lead to a better wellbeing and household health status with a more sustainable consuming behavior.

Suggested Citation

  • Kostakis, Ioannis, 2020. "Does tobacco spending crowd-out the household budget? Preliminary results using nationwide survey data," MPRA Paper 102251, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102251
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    References listed on IDEAS

    as
    1. David Aristei & Luca Pieroni, 2008. "A double-hurdle approach to modelling tobacco consumption in Italy," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2463-2476.
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    4. Bonu, Sekhar & Rani, Manju & Jha, Prabhat & Peters, David H. & Nguyen, Son Nam, 2004. "Household tobacco and alcohol use, and child health: an exploratory study from India," Health Policy, Elsevier, vol. 70(1), pages 67-83, October.
    5. John, Rijo M., 2008. "Crowding out effect of tobacco expenditure and its implications on household resource allocation in India," Social Science & Medicine, Elsevier, vol. 66(6), pages 1356-1367, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Tobacco; Crowd out; Greece; Expenditure;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D10 - Microeconomics - - Household Behavior - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

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