The impact of tobacco expenditures on spending within Turkish households

The aim of this study is to determine whether tobacco spending has a 'crowding out' effect on food and utility spending within Turkish households. It also examines whether tobacco control policies have caused the spending patterns of smoking households to become similar to those of non-smoking households.

Using 2007 and 2011 Turkish Household Budget Surveys, we estimated the Quadratic Conditional Engel Curve (QCEC) to determine household spending patterns. The QCEC was estimated using the Three-Stage Least Square (3SLS) method with instrumental variables.

In Turkey, smoking households spend nearly 8% of their monthly budgets on smoking, while the expenditures of non-smoking households on food, utilities and housing average 9% more than those of smoking households. For both years studied, a crowding out effect was demonstrated whereby smoking expenditure results in decreased household expenditure on food, housing, durable/non-durable goods and education.

In Turkey, households including at least one smoker spend nearly 8% of their monthly budget on tobacco, with a converse reduction in spending on food and utilities. While tobacco control policies (eg, increasing taxes on tobacco products and extending smoking bans) have decreased tobacco consumption, these policies have had limited impact on the spending patterns of smoking households.