While Pakistan has a thriving cigarettes industry, it is not definitively clear how much spending on tobacco affects a household’s expenses on essentials like food, health and education. Such an insight could provide policymakers with a useful, household-level perspective to deal with public health consequences of tolerating an economic activity that reaps fiscal fruits in excess of Rs100 billion each year.
Now, a new study by SPDC, titled “The Impact of Tobacco Use on Household Consumption in Pakistan,” has attempted to analyze how cigarette consumption affects spending of families. The study argues that tobacco consumption in Pakistan is “crowding out” household spending, as tobacco reduces spending on basic needs like food, health, education and housing, especially for poor households.
The study estimates that tobacco is consumed in about 45 percent of households. The definition of a tobacco-user household involves having at least one adult in the house smoking. Such households spend an average of 3 percent of monthly expenses on tobacco. That seems like very low spending share, but it cannot be ignored. This is significant when compared to spending on other non-food, non-energy items.
Poor households end up spending more of their monthly budget on cigarettes, in percentage terms, than rich households. The poor are also more likely to smoke more than the rich. For lower income groups, especially, spending on tobacco eats up spending on health, education and leisure.
Meanwhile, tobacco non-user households allocate more of their monthly budget to health, education, housing and leisure than tobacco-user households. Besides, non-users also spend less on basic food items, suggesting a more balanced allocation of resources on different expenses.
Where the case for tobacco control emerges in the statistical analysis of the study is in the insight that lower cigarette use directly leads to more spending on other items that really matter.
The study estimates that when a low-income tobacco-user household reduces its tobacco spending by 50 percent, its spending on education is increased from 2.2 percent of budget to 6.8 percent; the households also spend 47 percent of their budget then on basic food items compared to 43 percent before; and their spending share for health also goes up from 3 percent to 4.5 percent of the budget. For high-income households, most of the savings from halving of tobacco budget go towards housing and health.
The report thus argues for better tobacco control policies to enhance the people’s well being in a low-per-capita-income economy. Stressing on linkage between poverty and higher tobacco consumption, the authors advocate that tobacco control must be incorporated into poverty eradication schemes. There are practical limitations in the way, however, that the report did not touch upon.
For instance, it isn’t a simple matter to wean smokers off those cigarettes; some folks may find another fix, so money may not be saved after all. Besides, linking government’s welfare handouts with quitting smoking will make it harder to administer given issues with verifying compliance. Such a requirement may even repel recipients. Still, this report has provided some food for thought for the proverbial policymaker.