Burning a hole in the budget: tobacco spending and its crowd-out of other goods.

Smoking is an expensive habit. Smoking households spend, on average, more than $US1000 annually on cigarettes. When a family member quits, in addition to the former smoker's improved long-term health, families benefit because savings from reduced cigarette expenditures can be allocated to other goods. For households in which some members continue to smoke, smoking expenditures crowd-out other purchases, which may affect other household members, as well as the smoker. We empirically analyse how expenditures on tobacco crowd-out consumption of other goods, estimating the patterns of substitution and complementarity between tobacco products and other categories of household expenditure. We use the Consumer Expenditure Survey data for the years 1995-2001, which we complement with regional price data and state cigarette prices. We estimate a consumer demand system that includes several main expenditure categories (cigarettes, food, alcohol, housing, apparel, transportation, medical care) and controls for socioeconomic variables and other sources of observable heterogeneity. Descriptive data indicate that, comparing smokers to nonsmokers, smokers spend less on housing. Results from the demand system indicate that as the price of cigarettes rises, households increase the quantity of food purchased, and, in some samples, reduce the quantity of apparel and housing purchased.

The empirical analysis of cigarette tax avoidance and illicit trade in Vietnam, 1998-2010.

Illicit trade carries the potential to magnify existing tobacco-related health care costs through increased availability of untaxed and inexpensive cigarettes. What is known with respect to the magnitude of illicit trade for Vietnam is produced primarily by the industry, and methodologies are typically opaque. Independent assessment of the illicit cigarette trade in Vietnam is vital to tobacco control policy. This paper measures the magnitude of illicit cigarette trade for Vietnam between 1998 and 2010 using two methods, discrepancies between legitimate domestic cigarette sales and domestic tobacco consumption estimated from surveys, and trade discrepancies as recorded by Vietnam and trade partners. The results indicate that Vietnam likely experienced net smuggling in during the period studied. With the inclusion of adjustments for survey respondent under-reporting, inward illicit trade likely occurred in three of the four years for which surveys were available. Discrepancies in trade records indicate that the value of smuggled cigarettes into Vietnam ranges from $100 million to $300 million between 2000 and 2010 and that these cigarettes primarily originate in Singapore, Hong Kong, Macao, Malaysia, and Australia. Notable differences in trends over time exist between the two methods, but by comparison, the industry estimates consistently place the magnitude of illicit trade at the upper bounds of what this study shows. The unavailability of annual, survey-based estimates of consumption may obscure the true, annual trend over time. Second, as surveys changed over time, estimates relying on them may be inconsistent with one another. Finally, these two methods measure different components of illicit trade, specifically consumption of illicit cigarettes regardless of origin and smuggling of cigarettes into a particular market. However, absent a gold standard, comparisons of different approaches to illicit trade measurement serve efforts to refine and improve measurement approaches and estimates.

Psychiatric correlates of snuff and chewing tobacco use.

Compared to the association between cigarette smoking and psychiatric disorders, relatively little is known about the relationship between smokeless tobacco use and psychiatric disorders. To identify the psychiatric correlates of smokeless tobacco use, the analysis used a national representative sample from the National Epidemiologic Survey on Alcohol and Related Conditions (NESARC) wave 1. Smokeless tobacco use was classified as exclusive snuff use, exclusive chewing tobacco, and dual use of both snuff and chewing tobacco at some time in the smokeless tobacco user's life. Lifetime psychiatric disorders were obtained via structured diagnostic interviews. The results show that the prevalence of lifetime exclusive snuff use, exclusive chewing tobacco, and dual use of both snuff and chewing tobacco was 2.16%, 2.52%, and 2.79%, respectively. After controlling for sociodemographic variables and cigarette smoking, the odds of exclusive chewing tobacco in persons with panic disorder and specific phobia were 1.53 and 1.41 times the odds in persons without those disorders, respectively. The odds of exclusive snuff use, exclusive chewing tobacco, and dual use of both products for individuals with alcohol use disorder were 1.97, 2.01, and 2.99 times the odds for those without alcohol use disorder, respectively. Respondents with cannabis use disorder were 1.44 times more likely to use snuff exclusively than those without cannabis use disorder. Respondents with inhalant/solvent use disorder were associated with 3.33 times the odds of exclusive chewing tobacco. In conclusion, this study highlights the specific links of anxiety disorder, alcohol, cannabis, and inhalant/solvent use disorders with different types of smokeless tobacco use.