Tobacco Use and Household Expenditures on Food, Education, and Healthcare in Ukraine

Smoking is still one of the top preventable causes of death in the world. However, the deteriorating effect of tobacco on health conditions develops over a long period. In contrast, tobacco expense could immediately decrease the available budget for other costs, even necessary ones. Literature evidence reveals that tobacco expenditures crowd out expenditures on food, clothing, healthcare, and education. As most smokers live in low- and middle-income countries, the crowding-out effect of tobacco expenses also exacerbates inequality across the world. This work aims to explore the specific case of emerging lower-middle-income economies on the example of Ukraine. Smoking was found to decrease food and beverage expenditures along with healthcare expenses. Concerning increasing excise tax on cigarettes, low-income households are expected to suffer more from crowding out expenses on necessities and improving human capital (healthcare and education).