The impact of tobacco expenditure on household consumption patterns in rural China
Smoking is not only unhealthy, it is also expensive. Spending on tobacco could drive out other critical expenditures, including basic needs. This crowd out effect would be greatest in low-income countries, affecting not only the smoker but the rest of the family as well. The aim of this study is to examine the impact of tobacco spending on household expenditure patterns in rural China. China is a low-income country with a high prevalence of smoking, especially among men. The data, a sample of 4538 households, are from a household survey conducted in six townships in two provinces in rural China. Fractional Logit (Flogit) model is used as the estimation method. We estimate the relationship between tobacco spending and spending on 17 other categories, controlling for socio-economic and demographic characteristics of the household. The results indicate that spending on tobacco affects human capital investment (e.g. education and health), future farming productivity (e.g. farming equipment and seeds), and financial security (e.g. saving and insurance). Smokers also tend to spend more on alcohol, thus exacerbating the impact of addictive substances on spending on basic needs. Smoking expenses can harm other family members by reducing expenditures on basic needs such as foods, utilities, and durable goods consumption. Thus smoking can have important intra-family distributional impacts.
Volume (Year): 62 (2006)
Issue (Month): 6 (March)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruce D. Meyer & James X. Sullivan, 2003. "Measuring the Well-Being of the Poor Using Income and Consumption," NBER Working Papers 9760, National Bureau of Economic Research, Inc.
- Mishra, Ashok K. & El-Osta, Hisham S. & Morehart, Mitchell J. & Johnson, James D. & Hopkins, Jeffrey W., 2002. "Income, Wealth, And The Economic Well-Being Of Farm Households," Agricultural Economics Reports 33967, United States Department of Agriculture, Economic Research Service.
- Lazear, Edward P. & Michael, Robert T., 1988. "Allocation of Income within the Household," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226469669, September.
- Hu, Teh-Wei & Mao, Zhengzhong, 2002. "ECONOMIC ANALYSIS OF TOBACCO AND OPTIONS FOR TOBACCO CONTROL: China Case Study," University of California at San Francisco, Center for Tobacco Control Research and Education qt5x2015sv, Center for Tobacco Control Research and Education, UC San Francisco.
- Papke, Leslie E & Wooldridge, Jeffrey M, 1996.
"Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
- Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.