Impoverishing effect of tobacco use in Vietnam

Tobacco consumption places a significant economic burden on households, which is particularly severe in developing countries like Vietnam. In a country where the social insurance system is weak and healthcare is often expensive, tobacco-consuming households may face a higher risk of living in poverty. Some evidence on the social consequences of tobacco consumption suggests that it might aggravate poverty and inequality in Vietnam; however, to the best of our knowledge, no research provides a reliable estimate of the impoverishing effect of tobacco use in the country thus far.

This study quantifies the direct impact of tobacco use on poverty, measured by a poverty head count and the total size of the poverty gap in Vietnam in 2018.

By deducting tobacco-related expenditure from the total household income, the authors recalculate the actual household disposable income and examine whether the households suffer from the state of secondary poverty. Data from the 2018 Vietnam Household Living Standards Survey were used for calculation.

(1) Total tobacco-related expenditure increased the number of poor people by 305 090 (0.31% of the country's population) in 2018. More than one-third of those impoverished people are children, who should be considered victims of adults' tobacco use. (2) Tobacco use increased the poverty gap by 0.08 percentage points from 2.20% to 2.28%. (3) The impoverishment effects of tobacco consumption vary across groups in society and appear to be more intense in rural areas, among ethnic minorities and in the two lowest quintiles of consumption.

This study confirms the impoverishing effect of tobacco use in Vietnam (305 090 people) and that the effects are heterogeneous across population groups. Therefore, controlling tobacco use should be a part of the broader poverty reduction strategy in Vietnam and should be wisely targeted so as to reduce poverty effectively.