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Crowding out effect of tobacco expenditure and its implications on household resource allocation in India

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  • John, Rijo M.

Abstract

This paper examines whether spending on tobacco crowds out expenditure on basic needs and whether it has implications on nutrition intake and household resource allocation in India. The paper uses a household sample survey from India for the year 1999-2000. A system of quadratic conditional Engel curves was estimated for a set of 10 broad groups of commodities. The results suggest that tobacco consuming households had lower consumption of certain commodities such as milk, education, clean fuels and entertainment which may have more direct bearing on women and children in the household than on men suggesting possible 'gender effects' and biases in the allocation of goods and services within the household. Tobacco spending was also found to have negative effects on per capita nutrition intake. The nature of crowding out was found to be similar in low- and high-income households.

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  • 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.
    • Handle: RePEc:eee:socmed:v:66:y:2008:i:6:p:1356-1367
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    Cited by:

    1. Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics.
    2. Jaya Jumrani & P. S. Birthal, 2017. "Does consumption of tobacco and alcohol affect household food security? Evidence from rural India," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(2), pages 255-279, April.
    3. Jian Jiu Chen & Sai Yin Ho & Wing Man Au & Man Ping Wang & Tai Hing Lam, 2015. "Family Smoking, Exposure to Secondhand Smoke at Home and Family Unhappiness in Children," IJERPH, MDPI, vol. 12(11), pages 1-14, November.
    4. Steven Block & Patrick Webb, 2009. "Up in Smoke: Tobacco Use, Expenditure on Food, and Child Malnutrition in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 58(1), pages 1-23, October.
    5. Nyagwachi, Abel Otwori & Chelwa, Grieve & van Walbeek, Corné, 2020. "The effect of tobacco- and alcohol-control policies on household spending patterns in Kenya: An approach using matched difference in differences," Social Science & Medicine, Elsevier, vol. 256(C).
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    9. Aubrey Jolex & Ben Kaluwa, 2022. "Crowding Out Effects of Alcohol Consumption Expenditure on Household Resource Allocation in Malawi," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-12, February.
    10. Koch, Steven F., 2018. "Quasi-experimental evidence on tobacco tax regressivity," Social Science & Medicine, Elsevier, vol. 196(C), pages 19-28.
    11. Jin, Hyun Joung & Cho, Sung Min, 2021. "Effects of cigarette price increase on fresh food expenditures of low-income South Korean households that spend relatively more on cigarettes," Health Policy, Elsevier, vol. 125(1), pages 75-82.
    12. Marko Vladisavljević & Jovan Zubović & Mihajlo Đukić & Olivera Jovanović, 2021. "Inequality-Reducing Effects of Tobacco Tax Increase: Accounting for Behavioral Response of Low-, Middle-, and High-Income Households in Serbia," IJERPH, MDPI, vol. 18(18), pages 1-19, September.
    13. Koch, Steven & Alaba, Olufunke, 2010. "On health insurance and household decisions: A treatment effect analysis," Social Science & Medicine, Elsevier, vol. 70(2), pages 175-182, January.
    14. White, Justin S. & Basu, Sanjay, 2016. "Does the benefits schedule of cash assistance programs affect the purchase of temptation goods? Evidence from Peru," Journal of Health Economics, Elsevier, vol. 46(C), pages 70-89.
    15. Wu, Daphne C. & Shannon, Geordan & Reynales-Shigematsu, Luz Myriam & Saenz de Miera, Belen & Llorente, Blanca & Jha, Prabhat, 2021. "Implications of household tobacco and alcohol use on child health and women's welfare in six low and middle-income countries: An analysis from a gender perspective," Social Science & Medicine, Elsevier, vol. 281(C).
    16. Adem Aksoy & Abdulbaki Bilgic & Steven T. Yen & Faruk Urak, 2019. "Determinants of Household Alcohol and Tobacco Expenditures in Turkey," Journal of Family and Economic Issues, Springer, vol. 40(4), pages 609-622, December.
    17. Grieve Chelwa & Steven F Koch, 2019. "The effect of tobacco expenditure on expenditure shares in South African households: A genetic matching approach," PLOS ONE, Public Library of Science, vol. 14(9), pages 1-16, September.
    18. Muhammad Jami Husain & Biplab Kumar Datta & Mandeep K Virk-Baker & Mark Parascandola & Bazlul Haque Khondker, 2018. "The crowding-out effect of tobacco expenditure on household spending patterns in Bangladesh," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-15, October.
    19. Subramanian, Arjunan & Kumar, Parmod, 2017. "The impact of price policy on demand for alcohol in rural India," Social Science & Medicine, Elsevier, vol. 191(C), pages 176-185.
    20. Rama Pal, 2013. "Out-of-Pocket Health Expenditure: Impact on the Consumption of Indian Households," Oxford Development Studies, Taylor & Francis Journals, vol. 41(2), pages 258-279, June.
    21. 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.

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