Poverty Impact of Household Tobacco Expenditures in Malaysia

Presenter: Chiu-Wan Ng, University of Malaya

Abstract

Background: The 2006 National Health and Morbidity Survey estimated that about 21.5% of persons aged 18 years and above were current smokers in Malaysia. The prevalence was higher in rural compared to urban areas (26.2% vs 19.0%). Smoking can be an expensive habit and as such household expenditures on tobacco can have a significant economic impact on households especially the poorer ones. The aim of this study is to examine the extent to which households were impoverished by expenditures on tobacco.

Methodology: We analysed data from the 2004/2005 Household Expenditure Survey conducted by the Department of Statistics, Malaysia. This nationally representative survey covered a total of 14,084 households. We used the official poverty lines developed for different states in Malaysia to estimate the poverty head count. The poverty head count denotes the proportion of households whose consumption expenditures fall below the poverty line. The poverty impact of household tobacco expenditures is estimated by the change in poverty head count after expenditures on tobacco had been deducted from household consumption expenditures.

Findings: About 38% of all households (44% of rural and 35% of urban households) had incurred expenditures on tobacco. On average, these households spent RM73.19 monthly on tobacco products or 5.01% of total household consumption expenditures. Rural households spent less than urban households (RM 60.85 vs RM 81.14) but the expenditures in these households constituted a higher proportion of total consumption expenditures (5.28% vs 4.84%). Consequently we find that the poverty impact of household tobacco expenditures was greater in rural than in urban households (0.89% vs 0.46%). The overall poverty impact of household tobacco expenditures was 0.60% and we estimated that about 35,463 households (or 199,092 persons) may have been impoverished due to tobacco expenditures.

Conclusions: Programmes to reduce tobacco use would not only serve public health interests but also supplement poverty reduction strategies in Malaysia.