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S26 5 smoking, standard of living, and poverty in china- hu teh-wei
1. Smoking, Standard of Living, and
Poverty in China
Teh-wei Hu
University of California, Berkeley
and
Public Health Institute
To be presented at the 15th WCTOH
Singapore March 24, 2012
Funding: USNIH/Fogarty International Center
Grant (R01-TW05938)
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2. Overview
I. Conceptual framework
II. Smoking expenditures among Chinese
households
III. Impact of smoking on household
expenditures and standard of living
IV. Impact of smoking on medical expenditures
and poverty
V. Conclusions
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3. I. Conceptual Framework
• Smoking reduces disposable income
• Smoking reduces standard of living
• Smoking leads to higher medical expenditures
• Causes of poverty – human capital theory
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4. Reduce
Reduce Expenditures on
Disposable Food, Housing,
Income Clothing,
Education
Reduced Standard
of Living
Impoverishment
Smoking Poverty
Increased
Poor Health Medical
Status Expenditures
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5. Trade-off Between Smoking and
Standard of Living
Regression model:
(1) Expenditures per capita = f(age, family size,
education, per capita income, urban,
cigarette consumption)
(2) Expenditures per capita = f(age, family size,
education, per capita income, urban,
cigarette consumption)
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6. Impact of Smoking on Standard of
Living
• Standard of living =
Total Expenditure (TE) – Cigarette Expenditure (CE)
• Smoking Status =
# cigarette consumption/per day
(TE – CE) / cigarette consumption
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12. Urban Sample (smoker sample)
Poverty Near Poverty Non-Poverty
Daily Consumption
11.2 11.9 12.0
(# of cigarette)
Price per pack (Yuan) 3.8 4.7 8.2
Monthly Cigarette
29 46 126
Expenditures (Yuan)
Percent of Foreign
0.8% 4.6% 6.6%
Cigarettes
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13. Rural Sample (smoker sample)
Poverty Near Poverty Non-Poverty
Daily Consumption
14.4 16.2 18.6
(# of cigarette)
Price per pack (Yuan) 1.1 1.2 1.7
Monthly Cigarette
24 29 49
Expenditures (Yuan)
Percent of Foreign
0 0 0.1%
Cigarettes
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14. Trade-off Between Cigarette
Expenditures and Standard of Living
One additional Yuan per month will reduce…
• Total household expenditures
(minus tobacco) 0.52 Yuan
• Food expenditures per capita 0.05 Yuan
• Housing expenditures per capita 0.05 Yuan
• Clothing expenditures 0.02 Yuan
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15. Trade-off Between Cigarette
Consumption and Standard of Living
One pack per month will reduce…
• Total household expenditures
(minus tobacco) 2.4 Yuan
• Food expenditures per capita 0.5 Yuan
• Housing expenditures per capita 0.4 Yuan
• Clothing expenditures 0.2 Yuan
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16. IV. Excessive Medical Spending and
Impoverishment (among lowest
income quintile)
Rural Poverty Rate Urban Poverty Rate
Prevailing Income 29.6% 58.3%
Income excessive
(after medical spending) 32.2% 65.4%
Income poverty rate 2.6% 7.1%
Projected Populations 6.3 5.8
(millions)
Liu, Rao, Hu, et al (2006) 16
17. Spending on Cigarette and
Impoverishment
Rural Poverty Rate Urban Poverty Rate
Prevailing Income 29.6% 58.3%
Income after
subtracting cigarette 37.1% 77.0%
spending
Difference 7.5% 18.7%
Income poverty 17.1 24.8
(million) population
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18. V. Conclusions
Cigarette Expenditures:
• Have an immediate negative impact on living
standards
• Can reduce the nutritional states through the
replacement of expenditures on food
• Can lead to excessive medical expenditures
and impoverishment
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