2.4 Expenditure on tobacco products

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Another way of estimating tobacco consumption is to quantify spending by consumers on tobacco products.

2.4.1 Private final consumption

The Australian Bureau of Statistics (ABS) publishes quarterly reports of the amount spent by consumers on various products and services as part of a major quarterly report quantifying Australia's gross national product.¹ Its private final household consumption data include estimates of household spending on a range of goods and services; data for each category of expenditure for each quarter back to 1971 is available electronically.²

Table 2.4.1 and Figure 2.4.1 show ABS estimates of total amounts Australians spent on cigarettes and other tobacco products between 1960 and 2011. To provide an estimate of trends in the quantity smoked per person (rather than just changing prices of cigarettes and the growing population), the second column adjusts these figures to take into account changes in the average price of tobacco products before and since 2005, and also divides them by the number of people 15 years and over.

Note that ABS estimates of final private consumption of tobacco products are based not on sales data but rather on excise and manufacturing figures adjusted for imports, exports and changes in inventory.³ They also take into account the estimated impact of increases in duty on the retail price of cigarettes, using the tobacco component of the Consumer Price Index.

As can be seen from Table 2.4.1, total spending on tobacco products over the 50 years until June 2011 has increased almost 40-fold. However it must be remembered that the price of tobacco products has increased significantly over that period, well beyond increases in the Consumer Price Index. Taking into account price increases in tobacco products, Australians in 2010 were consuming 50% less than what they were spending on tobacco products at the peak of consumption in the early 1977. It also must be remembered that the population increased substantially over that period, from about 7 million adults in 1960 to more than 18 million in 2010. Based on private final consumption figures it is estimated that by 2010, Australians were consuming 70% less tobacco products per capita than they were consuming at the height of consumption in 1976.

2.4.2 Household expenditure

An alternative estimate of trends in tobacco consumption is provided by average household spending on tobacco products as reported in the ABS's (approximately) six-yearly surveys of household expenditure.⁵

The ABS estimates of household expenditure are compiled from diaries of spending by all members of the household but are calculated for the household as a whole, regardless of numbers and employment status of people in the household. The data included in Table 2.4.2⁶ are averages across all household types. Figure 2.4.2 shows the same information, adjusted to take into account increases in tobacco prices over the same period.

Average household expenditure more than doubled in the 25 years from 1984. However when the substantial increases in tobacco prices over that period are taken into account, it would seem that households in 2009–10 are purchasing on average just over one-fifth of the quantity of tobacco products they were purchasing in 1984.

Table 2.4.3 sets out average expenditure as reported in the ABSs Household Expenditure Survey for households with various levels of income.

While households with lower-than-average income tend to spend (on average) about the same amounts on tobacco products as higher income households, average spending on tobacco products as a percentage of total weekly expenditure is higher among low income households.⁸ Patterns of personal expenditure among different socio-economic groups are explored in more detail in Chapter 9, Section 9.4.

References

1. Australian Bureau of Statistics. 5204.0 Australian System of National Accounts 2010-11. Canberra: ABS, 2011. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyCatalogue/110953FFA28D4E52CA2572110002FF03?OpenDocument

2. Australian Bureau of Statistics. 5206.0 Australian National Accounts: national income, expenditure and product, Table 8. Household final consumption (HFCE) Australia. Canberra: ABS, 2011. Updated 7 December 2011 [viewed 10 December 2011] ; Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5206.0Sep%202011?OpenDocument

3. Australian Bureau of Statistics. 5216.0 Australian National Accounts: concepts, sources and methods, 2000. Canberra: ABS, 2000. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyCatalogue/8AC0D9921051E17BCA2570B300807D36?OpenDocument

4. Australian Bureau of Statistics. 3201.0 Population by age and sex, Australian states and territories, Jun 2010; Table 9. Estimated resident population by single year of age, Australia Canberra: ABS, 2010. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/B52C3903D894336DCA2568A9001393C1?opendocument

5. Australian Bureau of Statistics. 6503.0 Household Expenditure Survey and Survey of Income and Housing: User Guide, 2003-04. Canberra: ABS, 2006. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/4545461BB7FEB73CCA25718C001AB99C?opendocument

6. Australian Bureau of Statistics. 6503.0 Household Expenditure Survey and Survey of Income and Housing: summary of results, 2009-10. Canberra: ABS, 2011. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6530.02009-10?OpenDocument

7. Australian Bureau of Statistics. 6401.0 Consumer Price Index, Australia Table 11. CPI: group, sub-group and expenditure class, index numbers by capital city. Canberra: ABS, 2011. Updated 26 October 2011 [viewed 30 December 2011] ; Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6401.0Sep%202011?OpenDocument

8. Siahpush M, Borland R and Scollo M. Smoking and financial stress. Tobacco Control 2003;12:60-6. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/12/1/60