9.4 The relationship between tobacco smoking and financial stress

Last updated: July 2022
Suggested citation:
Greenhalgh, EM, Scollo, MM, & Pearce, M. 9.4 The relationship between tobacco smoking and financial stress. In Greenhalgh, EM, Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2022. Available from: http://www.tobaccoinaustralia.org.au/chapter-9-disadvantage/9-4-the-relationship-between-tobacco-smoking-and-f

 

Tobacco use is both a contributor to and an outcome of financial stress.1

9.4.1 Spending on tobacco as a cause of financial stress

According to the ABS 2015–16 Household Expenditure Survey, households with lower-than-average disposable incomes tend to spend (on average) similar amounts on tobacco products as higher income households. Estimated spending on cigarettes showed a similar pattern, where the lowest and highest income quintile households spent similar amounts on cigarettes each week. However, low income households spent more than twice as much on ‘other tobacco’—which would predominantly but not exclusively include roll-your-own tobacco—compared to the highest income households. Further, average spending on tobacco products as a percentage of total weekly expenditure is higher among low-income households. In the lowest-income households expenditure on tobacco products as a proportion of total household weekly expenditure was more than three times that of the highest income households—See Table 2.4.1.2 In households where the main source of income was government pensions and allowances, the reported weekly expenditure on tobacco products was $11.58, representing 1.7% of total household expenditure. Looking at household wealth (also known as net worth; the value of assets, such as property and investments, minus liabilities such as loans and credit card debts), spending on tobacco products comprised 1.7% of household spending among low wealth households, compared with 0.3% among high wealth households.  

Table 9.4.1
Average weekly expenditure on all tobacco products and estimated expenditure on cigarettes and other tobacco among households by income quintile, Australia 2015–16: in current dollars, and as percentage of total household expenditure

Source:  ABS 20172
* ‘Equivalised’ to adjust household income relative to household size.
^ Adjusted lowest income quintile excludes the first and second percentiles, which include very low income households who use other assets to maintain a higher standard of living. See http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/6530.0Explanatory+Notes12015-16.
# ‘Other tobacco’ includes roll-your-own tobacco. It excludes e-cigarettes and what the ABS refers to as ‘tobacco products not elsewhere classified’: See ABS 20172 , Table 3.3A.
~ Estimate has a wide relative standard error and should be interpreted with caution.

The ABS figures above include both smoking and non-smoking households. When isolating smoking households, the proportion of income spent on cigarettes among the lowest income group—and the gap between income groups—is substantially higher. For example, an analysis in NSW found that in 1998–99, the poorest smoking households spent an average of over 18 per cent of their income on tobacco, while smoking households in the top income quintile spent only three per cent of their total income on tobacco.3 A more recent Australian study in 2012 of socioeconomically smokers, more than half of whom lived below the poverty line (i.e., earned less than A$300/week), found that smokers spent an average of A$56.07 on tobacco each week.4 A survey of Aboriginal and Torres Strait Islander peoples who smoke in 2012–13 found that four in five (81%) reported spending too much money on cigarettes.5

International research shows similar disproportionate spending on tobacco among disadvantaged groups and the exacerbation of poverty from smoking.6-8 A UK report concluded that while about one million, or one in five (21%), smoking households were living below the poverty line, when tobacco expenditure was included in the assessment of poverty this increased to nearly a third (32%),equivalent to 1.5 million households. That is, the inclusion of tobacco costs moves an extra half a million households into poverty.9 Another UK study found that among social housing tenants, one in seven lived in poverty due to the impact of smoking on their finances, with tobacco taking up about one eighth of their disposable income.10 A survey of homeless smokers in Boston found that on average, they had spent $44 on tobacco in the past week, equating to 36% of their average monthly income. One-third said they had difficulty finding shelter, food, clothing, or a place to wash.11 Smoking can also exacerbate financial deprivation for children; research in the UK found that nearly half of all children in relative poverty in 2012 had at least one smoking parent, and about 432,000 additional children would be classed as being in poverty if parental tobacco expenditure were subtracted from household income.12

Smokers are more likely to experience financial stress than non-smokers.13 Among Australians who are socioeconomically disadvantaged, smoking exacerbates experiences of severe financial, social and material hardship.14 Factors such as lower income, high nicotine addiction, a social circle of smokers, and being of younger age are associated with a likelihood of experiencing an instance of ‘smoking-induced deprivation’—whereby the smoker has reported spending money on tobacco rather than on household essentials.15 Research from Canada, the USA, the UK, and Australia found that those who spent more on cigarettes were more likely to experience smoking-induced deprivation, which was predictive of financial stress.16 Another Australian study found that while economic insecurity was associated with a higher likelihood of smoking, it was also associated with decreased expenditure on tobacco, perhaps due to price-minimising strategies among smokers.17

Being unable to afford or access adequate food (termed ‘food insecurity’) is more common among people who smoke.18-25 This relationship appears to be bidirectional, such that people who are food insecure are more likely to take up smoking and vice versa.22 , 26 , 27 Potential pathways between food insecurity and smoking include the role of stress and negative affect, the effects of nicotine on appetite suppression, and a range of demographic, health and structural factors that increase the risk of both food insecurity and smoking.22 Among smokers who are food insecure, spending on tobacco may be prioritised over buying nutritious food.28 , 29 Australian research found that, among people who are highly disadvantaged, smokers are more likely than non-smokers to report going without meals.14 One study found that past-year food insecurity was significantly associated with daily but not non-daily smoking, independent of sociodemographic characteristics and alcohol use.30 Another found that higher nicotine dependence predicted financial stress related to affording food, housing, and living within one's income.31 In low- and middle-income countries, daily tobacco use is associated with lower household expenditures on education and healthcare.32 Children from households with food insecurity may also be more likely to be exposed to tobacco smoke during pregnancy and early life,33 placing them at greater risk of poor health outcomes (see Sections 3.7 and 3.8).

Employment status may also be an important factor in the relationship between smoking and financial stress, with smoking being a significant risk factor for unemployment.34 Australian research found that the odds of smoking were 32% higher when a person’s household was unemployed compared to times when the household was securely employed17 (see also Section 9.1). A Finnish study found that being both a smoker and a heavy drinker in early adulthood was negatively related to long-term earnings and employment later in life,35 while in the US one study estimated that continued heavy smoking in young adulthood results in a wage penalty at age 30 of 15.9% for women and 15.2% for men.36 Research in California found that smokers struggled to gain employment compared to non-smokers, and that those who did were paid less than non-smokers. Even after controlling for factors such as sex, stable housing, reliable transportation, criminal history, and prior treatment for alcohol or drug use, non-smokers were 24% more likely to be re-employed at one year relative to smokers.37 Another study in the US found that workplace discrimination was associated with current and daily smoking among racial/ethnic minorities.38

9.4.2 Financial stress and its influence on smoking abstinence

Some research suggests that low-income smokers, or smokers experiencing financial stress, are less likely to quit and remain quit.39-42 More severe withdrawal symptoms43 and higher levels of psychological distress44 , 45 among those with financial stress may promote smoking and negatively impact quitting. Developing financial stress may also increase rates of relapse among ex-smokers.46 Data from wave 4 of the International Tobacco Control Four-Country Survey showed that smokers experiencing financial stress were more likely than others to want to quit smoking, but at follow-up, they were less likely to have made an attempt to quit smoking. Among the smokers who had made a quit attempt, financial stress was associated with less chance of smoking abstinence at follow-up.47 Looking only at the Australian cohort, another study found that experiencing smoking-induced deprivation was associated with a lower likelihood of making quit attempts.48 A more recent study in the US found that smokers with financial strain made more quit attempts over one year, but they were no more successful in maintaining cessation than smokers without financial strain.49 On the other hand, research among older adults in the US found that becoming food insecure or becoming unemployed was associated with higher odds of smoking cessation.50

Although tobacco taxes have been criticised as disproportionately affecting disadvantaged smokers, they are the single most effective strategy to reduce tobacco use and therefore reduce the financial burden of smoking—see Section 13.11. See also InDepth 9A for a discussion of cessation interventions for highly disadvantaged and other priority groups in Australia.

9.4.3 Smoking cessation and the reduction of financial stress

Data from the Household Income and Labour Dynamics in Australia (HILDA) study show 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.51 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 wellbeing.52 Longitudinal research in the US similarly found that among smokers with financial strain, those who quit were less likely to still be experiencing financial strain at follow-up.49

 

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References

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