Crowding-out effect of tobacco consumption in Serbia

Vladisavljević, Marko and Zubović, Jovan and Jovanović, Olivera and Đukić, Mihajlo (2023) Crowding-out effect of tobacco consumption in Serbia. Tobacco Control. ISSN 0964-4563

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Abstract

Background: Although smoking prevalence and
intensity in Serbia have decreased in recent years,
expenditures on tobacco products still represent a
significant portion of household budgets. As households
have limited resources at their disposal, consuming
tobacco means that they spend less on other items
such as food, clothing, education and healthcare. This is
particularly true for low-income households, for whom
the pressure on the household budget is even higher.
Objectives: In this research we estimate the effect of
tobacco consumption on other consumption items in
Serbia, which is the first estimation of this type for the
countries in Eastern Europe.
Methods: We use microdata from the Household
Budget Survey and estimation approach that includes
the combination of seemingly unrelated regression and
instrumental variables. Besides estimating the overall
effect we analyse the differences in effects between low-income, medium-income and high-income households.
Results: Expenditures on tobacco reduce consumption
on food, clothing and education and increase the
budget shares spent on complementary consumption
items such as alcohol, hotels, bars and restaurants. In
most cases, the effects are more pronounced for low-income households than for other groups. These results
suggest that aside from the negative effects of tobacco
consumption on health, it also distorts household
consumption structure, while affecting intrahousehold
allocation and future health and development of other
household members.
Conclusions: The results from this research underline
the negative effect that tobacco expenditures have
on consumption of other products. The only way for
households to decrease expenditures on tobacco is to
stop smoking, as the consumption of those who continue
smoking changes less than cigarettes prices. To ensure
that households stop smoking and instead direct their
expenditures towards more productive purposes, the
Serbian government should adopt new policies and
strengthen enforcement of existing tobacco control
measures.

Item Type:	Article
Additional Information:	COBISS.ID=114990089
Research Department:	Welfare Economics
Depositing User:	Jelena Banovic
Date Deposited:	09 May 2023 11:35
Last Modified:	15 May 2023 12:21
URI:	http://35.240.28.64/id/eprint/1904
Author Links:	[error in script] No links available.

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