Does Tobacco Consumption Affect Allocation of Household Expenditure: A Study Literature

Abstract

Tobacco consumption is a continuing social problem around the world. This is because tobacco is a silent killer that contributes to mortality and chronic disease. Even though the consumption of tobacco contributes to social and health problems, it also contributes to economic problems. This is due to smoking is always associated with poverty and one of factors contributed to poverty in developed or developing countries. This research is a literature review study that collects and compares various previous research results related to the impact of the increase in cigarette prices, which is a government policy in reducing cigarette consumption by increasing taxes and customs affecting household consumption of other expenditures such as education, healthcare, communication, fuel and food. In addition, it also identifies whether the costs of cigarette consumption are the same for low-income and high-income households. A review of the literature shows that that the increasing tobacco consumption by poor households will sacrifice their consumption for almost all types of expenditure such as food, education, health, entertainment, communication, and durable goods. The case will different for poor and higher income household. Higher income household will not have affected their consumption on other household expenses as much as poorer income household.