Tobacco Expenditure Leads to Reduced Spending on Basic Needs Among Poor Households

This Policy Brief was written by the Social Policy and Development Centre (SPDC) in Pakistan. The policy brief discusses the impact that tobacco expenditure has on household consumption in Pakistan. The findings complement previous research on the crowding out effect in low- and middle-income countries, which shows that tobacco use results in decreased household spending on other basic needs. SPDC’s research demonstrates the negative effect of tobacco spending, especially on poor households, where a larger share of the budget is spent on tobacco than on health or education. Simulating a decrease in tobacco spending, this research finds that the newly available funds are distributed between basic food, housing, education and other commodity groups. The policy brief concludes that tobacco control policies should be an essential part of poverty reduction efforts.

A corresponding Report can be found here.