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

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.