Household Tobacco Expenditure and Child Health Outcomes: Causal Evidence from a Transitional Economy

<b>Background/Objectives</b>: The relationship between household tobacco expenditure and child health has attracted considerable attention from both academic and policy communities, as tobacco expenditure can influence children's health, nutrition, and overall well-being in multiple ways, particularly in rural and low-income settings. This study examines the causal impact of household tobacco expenditure on child health outcomes in a transitional economy. <b>Methods</b>: Using nationally representative microdata from the most recent Household Living Standards Survey, the authors employ Ordinary Least Squares (OLS), Random Effects (RE), and Instrumental Variable (IV) estimations to identify the effects of tobacco spending on children's healthcare utilization and health status. <b>Results</b>: The results consistently show that higher household tobacco expenditure significantly increases the likelihood of hospitalization among Vietnamese children, with the effects being most pronounced for those under six years of age. Moreover, the authors uncover substantial heterogeneity across gender, maternal age at childbirth, and regional contexts, highlighting persistent socioeconomic inequalities in health outcomes. <b>Conclusions</b>: This study provides compelling evidence of the adverse effects of household tobacco expenditure on children's health in Vietnam. Theoretically, the study contributes to the literature on the economics of health and intra-household resource allocation by providing micro-level causal evidence from a transitional setting. From a policy perspective, the findings underscore the need for targeted fiscal and public health interventions to mitigate tobacco-related welfare losses and to promote equitable access to healthcare among vulnerable populations.