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Tobacco Substitution and the Poor

Author

Listed:
  • Steven F. Koch

    () (Department of Economics, University of Pretoria)

  • Gauthier Tshiswaka-Kashalala

    () (Department of Transportation, South Africa)

Abstract

Tobacco control policies have effectively raised the price of cigarettes and other tobacco products. However, these price increases have been shown to disproportionately fall upon poorer households, with fewer resources. In this analysis, we provide an initial indication of the effect increased prices might have on household allocations, by considering substitution and complementation related to tobacco consumption. Our results show substitution between tobacco and most household consumption items, although elasticities tend to be highest amongst the poorest households.

Suggested Citation

  • Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics.
  • Handle: RePEc:pre:wpaper:200832
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    References listed on IDEAS

    as
    1. 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.
    2. Judith Streak & Derek Yu & Servaas van der Berg, 2008. "How invariant is South African child poverty to the choice of equivalence scale or poverty measure?," Working Papers 13/2008, Stellenbosch University, Department of Economics.
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    5. Steve F Koch, 2005. "The Aid and Maid System: South African Household Data Pitfalls," Working Papers 24, Economic Research Southern Africa.
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    11. Gregory J. Colman & Dahlia K. Remler, 2008. "Vertical equity consequences of very high cigarette tax increases: If the poor are the ones smoking, how could cigarette tax increases be progressive?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(2), pages 376-400.
    12. Pu, Cheng-yun & Lan, Virginia & Chou, Yiing-Jenq & Lan, Chung-fu, 2008. "The crowding-out effects of tobacco and alcohol where expenditure shares are low: Analyzing expenditure data for Taiwan," Social Science & Medicine, Elsevier, vol. 66(9), pages 1979-1989, May.
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    Cited by:

    1. 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.
    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.

    More about this item

    Keywords

    Crowd-out; Crowd-in; 3SLS; Tobacco Substitution Elasticity;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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