2.4 Expenditure on tobacco products

Last updated: May 2019
Suggested citation: Bayly, M and Scollo M 2.4 Expenditure on tobacco products. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2019. Available from http://www.tobaccoinaustralia.org.au/chapter-2-consumption/2-4-expenditure-on-tobacco-products  

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) reports on the amount spent by consumers on various products and services as part of a major quarterly estimates report quantifying Australia's gross national product.1 Its private final household consumption data  for each category of expenditure for each quarter back to 1960 is available electronically.2 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.

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 2018. Total private final household consumption of cigarettes and tobacco is shown in current dollars (trend series, adjusting for irregularities in original quarterly estimates), and then in chain volumes (trend series) to account for production volumes and previous year prices. Finally, to provide an estimate of trends in the quantity smoked per person (rather than just the increasing total expenditure resulting from increasing prices of cigarettes and the growing population), the final column adjusts these chain volume figures by total population size, providing a per capita estimate of cigarette and tobacco consumption adjusting for price, volume, and population size over time.  

Table 2.4.1
Private final household consumption on cigarettes and tobacco: in current prices, chain volume*, and in chain volume per capita*—Australia, 1960 to 2018 (selected years) 

Source: ABS 20192, 4, 5

* Historical chain volume estimates of consumption are frequently revised to take account of changes in relative prices. Readers are advised to refer to latest available data in the source document.

 

 

Figure 2.4.1
Private final household consumption on cigarettes and tobacco in chain volume (trend) per capita—Australia, 1960 to 2018

Source: As per Table 2.4.1

As can be seen from Table 2.4.1, total estimated household spending on tobacco products over the almost 60 years until December 2018 has increased 50-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 and volume in tobacco products (that is, using chain volumes), Australians in 2018 were spending 55% less than they were at 1960, and two-thirds less than at the peak of consumption in 1975. It also must be remembered that the Australian population increased substantially over that period, from about 10 million in 1960 to more than 25 million in 2018. Adjusting for population size, private final household consumption figures show that Australians were consuming more than 80% less tobacco products per capita than they were consuming at the height of (per capita) consumption in 1970.

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.6

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 2.4.2 are averages across all household types. Figure 2.4.2 shows weekly household expenditure on tobacco products adjusted to take into account increases in tobacco prices over the same period.

Table 2.4.2
Reported weekly expenditure on cigarettes and other tobacco products, average all households, Australia, 1984 to 2015–16 in current dollars, and adjusted to current tobacco prices

Sources: ABS 20177, 8

* Adjusted using the 2016 tobacco subindex of the consumer price index.

 

Figure 2.4.2
Reported weekly expenditure on cigarettes and other tobacco products, average all households, Australia 1984 to 2015–16 adjusted to average tobacco prices in 2015–16

Sources: As per Table 2.4.2 

Average household expenditure on tobacco products more than doubled in the 30 years from 1984. However when the substantial increases in tobacco prices over that period are taken into account, it would seem that households in 2015–16 purchased on average just over one-eighth of the quantity of tobacco products they were purchasing in 1984.

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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 Expenditure (HFCE). Canberra, Australia 2019. Last update: Viewed 29/04/2019. Available from: http://www.abs.gov.au/Ausstats/abs@.nsf/mf/5206.0.

3. Australian Bureau of Statistics. 5216.0 Australian National Accounts: concepts, sources and methods, 2015. Canberra: ABS, 2015. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyCatalogue/8AC0D9921051E17BCA2570B300807D36?OpenDocument.

4. Australian Bureau of Statistics. 3101.0 Australian Demographic Statistics, TABLE 4. Estimated Resident Population, States and Territories (Number). Canberra, Australia 2019. Last update: Viewed 29/04/2019. Available from: http://www.abs.gov.au/Ausstats/abs@.nsf/mf/3101.0.

5. Australian Bureau of Statistics. 3105.0.65.001 Australian Historical Population Statistics, 2019. Canberra, Australia 2019. Last update: 18/04/2019; Viewed 29/04/2019. Available from: http://www.abs.gov.au/ausstats/abs@.nsf/mf/3105.0.65.001/.

6. Australian Bureau of Statistics. 6503.0 - Household Expenditure Survey and Survey of Income and Housing, User Guide, Australia, 2015-16  Canberra, Australia 2017. Last update: Viewed 30/04/2019. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6503.0Main+Features100002015-16?OpenDocument.

7. Australian Bureau of Statistics. 6530.0 - Household Expenditure Survey, Australia: Summary of Results, 2015-16: 1 Household Expenditure, 1984 to 2015-16 Canberra, Australia 2017. Last update: Viewed 30/04/2019. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6530.02015-16?OpenDocument.

8. Australian Bureau of Statistics. 6401.0 Consumer Price Index, Australia, Table 7, CPI: Group, Sub-group and Expenditure Class, Weighted Average of Eight Capital Cities. Canberra: ABS, 2017. Last update: Viewed 19 September 2017. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/938DA570A34A8EDACA2568A900139350?opendocument.

9. Australian Bureau of Statistics. 6530 Household Expenditure Survey, Australia: Summary of Results, 2015–16: 3 Equivalised Disposable Household Income Quintiles. Canberra, Australia 2017. Last update: Viewed 02/05/2019. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6530.02015-16?OpenDocument.

10. Siahpush M. Socioeconomic status and tobacco expenditure among Australian households; results from the 1998-99 Household Expenditure Survey. Journal of Epidemiology and Community Health, 2003; 57:798-801. Available from: http://jech.bmj.com/cgi/content/abstract/57/10/798