The impact of tobacco use on spending priorities in Jordan in 2017: the “crowding out” effect

Purpose Tobacco expenditure within households may compete with essential goods, impacting overall well-being. This study aims to investigate the extent to which tobacco spending displaces and “crowd out” other household expenses in Jordan. Design/methodology/approach The fractional logit model was fitted to analyze the 2017 Household Expenditure and Income Survey data provided by the Jordan Department of Statistics, correlating tobacco expenditure with other costs while controlling for demographic factors. Findings Jordanian households’ spending on tobacco predominantly affects allocations for food, education and health. While reductions were observed, the absolute reductions in spending on other items were small. Effective tobacco control policies, mindful of price and income elasticities, could enhance spending on essential goods, benefiting family welfare. Findings reveal 27.5% of Jordanian households do not purchase tobacco; 71.9% spend minimally; and 0.6% moderately. Tobacco expenditure significantly reduces the funds available for food (0.223%), education (0.323%), health care (0.031%), furniture (0.31%) and housing (0.09%); the confidence intervals are (0.303,0.143), (0.495,0.151), (0.192,0.130), (0.123,0.061), (0.388,0.208), respectively. Originality/value The study demonstrates that the implemented tobacco policy that leads to a decrease in spending on tobacco is more likely to have positive effect on spending on other goods, hence increasing the overall welfare of households. This study shows that spending on tobacco crowds out spending on other goods, and there is a dearth of sufficient empirical evidence to show if spending on tobacco affects the well-being of household members and reduces the consumption of other goods.