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Title Investigating the crowd-out effects of tobacco and alcohol expenditure on household resource allocation in Namibia
Full text http://hdl.handle.net/11070/3215
Date 2020
Author(s) Iipumbu, Laili Tamukondjomeitaalo
Abstract A thesis submitted in partial fulfilment of the requirements for the degree of master of science (Economics) - Tobacco and alcohol consumption are not only unhealthy, but also potentially bum a hole in household disposable income, reducing expenditure on basic household commodities. Evidence suggests that the impact is higher in low- and middle-income countries and among poorer households. Using the 2015/ 16 Namibia Household Income and Expenditure Survey (NHIES), a nationally representative household-level dataset, this thesis examines the crowding-out effects of tobacco and alcohol expenditure on household resource allocation to food and non-food needs. A system of quadratic conditional Engel curves was estimated for a set of eleven broad groups of commodities using a Three-Stage Least Squares Generalised Method of Moments, an econometric approach that minimises the problem of simultaneity bias. For sensitivity, the study employed two measures of tobacco and alcohol expenditure. The first measure is binary equivalent to one if the household spends on tobacco and/or alcohol. The results suggest that tobacco and alcohol-consuming households spend less on basic commodities such as housing, furnishing, transport, recreation, education, accommodation and health, and spend more on food and clothing. The second measure, household expenditure share on tobacco and/or alcohol, suggests that expenditure on these goods crowds out expenditure on health, education, accommodation and miscellaneous, and crowds in food, clothing, communication and recreation. The analysis is further disaggregated to control for preference heterogeneity of households (some goods and services are perceived differently based on household socioeconomic status). The resu lts point to a vicious circle of poverty where the poor are trapped in poverty by reducing spending on basic household basic needs. The results indicate that any public policy option that reduces the consumption of tobacco and alcohol does not only enhance the associated health benefits, but also helps to improve the living standards of households, especially poor and vulnerable households.
Subject(s) Living standards of households; Tobacco and alcohol consumption; Income and expenditure survey
Language en
Publisher University of Namibia
Type of publication Thesis
Repository Windhoek - University of Namibia
Added to C-A: 2022-08-22;12:22:05