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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
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    More about this item

    Keywords

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    JEL classification:

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

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