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

Ioannis Kostakis

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Tobacco; Crowd out; Greece; Expenditure (search for similar items in EconPapers)
JEL-codes: D1 D10 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-hea
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