Relationship between smoking and health and education spending in Chile

Objective: To estimate the degree to which tobacco consumption is associated with spending on a set of goods and services in Chile, especially health and education, for the total population as well as for specific subgroups. Methods: A seemingly unrelated regression equation system was used to estimate the statistical relationship between having tobacco expenditures and the budget share allocated to other items for the total population and for specific subgroups in Chile (eg, households within the bottom/top 33% by total expenditures). The use of household-level data allows for the control of a number of sociodemographic characteristics. The nationally representative 2012 Chilean Household Expenditure Survey was used for the analysis. Results: Tobacco consumption is associated with lower budget shares allocated to healthcare, education and housing expenses, especially for poorer households. In the case of health, not consuming tobacco is related to higher health expenditures: up to 32% for the total population. Similarly, in the case of education, not consuming tobacco is statistically related to higher education expenditures: up to 16% for the total population. For all groups, tobacco consumption is also related to a significantly higher budget share allocated to alcoholic beverages. Conclusions: The strong significant statistical relationship found between tobacco consumption and resources allocated to healthcare and education consumption may be indicative of the existence of a crowding out effect of tobacco. This effect, in turn, may increase the burden that the rest of society must bear for the increased healthcare that they require because of tobacco consumption.