9.4 The relationship between tobacco smoking and financial stress

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Tobacco use is both a contributor to and an outcome of financial stress.

9.4.1 Spending on tobacco as a cause of financial stress

The Australian Bureau of Statistics regular survey of household expenditure38 provides interesting data about the relationship between smoking and financial stress.

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.89, 90

The survey also indicates that households which include at least one person who spends money on tobacco products were much more likely to report financial stress. Financial stress was defined according to a 14-point scale, which included items such as not having enough money for holidays, having friends over for a meal and having a night out. Fifty-eight percent of smoking households reported having experienced any one of these 14 items compared to 40% of non-smoking households. About 11% of smoking households compared to only 4% of non-smoking household reported severe financial stress characterised by 'going without meals', 'being unable to heat the home' or 'seeking assistance from welfare agencies'. The odds of experiencing any financial stress were 1.5 times greater, and the odds of severe financial stress were twice as large for smoking households than non-smoking households.

At all income levels, smokers were more likely to experience financial distress than were non-smokers.89

Among smoking households, a higher percentage of total household expenditure on tobacco was significantly related to financial stress.89

Data from the International Tobacco Control Policy Evaluation Study (ITCPES) similarly indicate that about 33% of smokers in Australia have experienced at least one instance of smoking-induced deprivation (SID), which is defined as having at least once in the past six months spent money on cigarettes that would better have been spent on food or other items The odds of experiencing SID were twice as high among low-income compared to high-income smokers. Rates of SID were higher among the young and those with higher levels of dependence.92

9.4.2 Financial stress and its influence on smoking abstinence

The relationship between smoking and financial stress may be reciprocal. A study of smokers taking part in a long-term prospective study of household employment and income trends, the Australian Household Income and Labour Dynamics (HILDA) survey, revealed that smokers with financial stress were less likely to quit, and that ex-smokers with more financial stress were more likely to relapse.93

9.4.3 Smoking cessation and the reduction of financial stress

Data from the HILDA study also reveal that if smokers do manage to quit, their odds of experiencing financial stress reduce substantially when compared to those of continuing smokers. Data from the first, second and third waves of the study indicated that, on average, a smoker who quits could be expected to have a 42% reduction in the odds of experiencing financial stress.94 Another study which used data from four waves of HILDA showed that the odds of experiencing financial stress were 25% smaller for quitters than continuing smokers, and there was strong evidence of enhanced material well being.95