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BackgroundTobacco consumption constitutes a sizable portion of household consumption expenditure, which can lead to reduced expenditures on other basic commodities. This is known as the crowding-out effect. This study analyzes the crowding-out effect of tobacco consumption in Bangladesh, and the research findings have relevance for strengthening the tobacco control for improving health and well-being.MethodsWe analyzed data from the Bangladesh Household Income and Expenditure Survey 2010 to examine the differences in consumption expenditure pattern between tobacco user and non-user households. We further categorize tobacco user households in three mutually exclusive groups of smoking-only, smokeless-only, and dual (both smoking and smokeless); and investigated the crowding-out effects for these subgroups. We compared the mean expenditure shares of different types of households, and then estimated the conditional Engel curves for various expenditure categories using Seemingly Unrelated Regression (SUR) method. Crowding-out was considered to have occurred if estimated coefficient of the tobacco use indicator was negative and statistically significant.ResultsWe find that tobacco user households on average allocated less in clothing, housing, education, energy, and transportation and communication compared to tobacco non-user households. The SUR estimates also confirmed crowding-out in these consumption categories. Mean expenditure share of food and medical expenditure of tobacco user households, however, are greater than those of tobacco non-user households. Albeit similar patterns observed for different tobacco user households, there were differences in magnitudes depending on the type of tobacco-use, rural-urban locations and economic status.ConclusionPolicy measures that reduce tobacco use could reduce displacement of commodities by households with tobacco users, including those commodities that can contribute to human capital investments.
We examine the impacts of WTO agreements and domestic trade policy reforms on production, welfare and poverty in Bangladesh. A sequential dynamic computable general equilibrium (CGE) model, which takes into account accumulation effects, is used allowing for long-run analysis. The study is based on the 2000 SAM of Bangladesh including 15 production sectors, four factors of production (skilled and unskilled labor, agricultural and non-agricultural capital) and nine household groups (five in rural areas and four in urban areas) based on the year 2000 household survey. To examine the link between the macro effects and micro effects in terms of poverty, we use the representative household approach with actual intra-group income distributions.The study presents five simulations for which the major findings are: (1) the Doha scenario has negative implications for the overall macro economy, household welfare and poverty in Bangladesh. Terms of trade deteriorate and consumer prices, particularly food prices, increase more than nominal incomes, especially among poor households; (2) Free world trade has similar, but larger, impacts; (3) Domestic trade liberalization induces an expansion of agricultural and light manufacturing sectors, favorable changes in the domestic terms of trade. Although the shortrun welfare and poverty impacts are negative, these turn positive in the long run when capital has adjusted through new investments. Rising unskilled wage rates make the poorest households the biggest winners in terms of welfare and poverty reduction; (4) Domestic liberalization effects far outweigh those of free world trade when these scenarios are combined; and (5) Remittances constitute a powerful poverty-reducing tool given their greater importance in the income of the poor.
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