From Tobacco to Potato: Reducing Tobacco Spending Significantly Increases Household Expenditure on Essential Commodities

This Policy Brief was written by the Center for Indonesia's Strategic Development Initiatives (CISDI) in Indonesia. The policy brief examines the impact of tobacco consumption on household budgets, as well as the effect of reducing tobacco spending. Currently, smoking households spend around 11% of their monthly budgets on cigarettes. The researchers find that this decreases spending on other commodities, including necessities, especially among low-income groups. Smoking households dedicate a lower share of their budgets to food, housing, and health care. At the same time, tobacco expenditure is associated with increased spending on beverages, such as sugar-sweetened beverages, and ready-made foods. These differences result in a lower daily nutrition intake in smoking households and may threaten the development of youth. The study also simulates the impact of a 50% decrease in tobacco spending. As a result, spending on food staples and meat would increase by 14% and 35%, respectively, in addition to a 24% increase in spending on housing, and a 31% increase in spending on education. The policy brief concludes with recommendations for more effective tobacco control policies to reduce the negative impact of tobacco spending on households.

A corresponding Report can be found here.