The Impoverishing Effect of Tobacco Use in Montenegro [Working Paper Series]

This Working Paper was written by the Institute for Socio-Economic Analysis (ISEA) in Montenegro. The working paper assesses the effect of tobacco expenditures and related health care costs on existing and secondary poverty. The study uses data from a household budget survey in 2021 and poverty measurement tools. The findings show that tobacco spending, alone, pushes 1.01% of the population below the poverty line, known as secondary poverty. Combined with health care costs, more than 10,000 people, or 1.62% of the population, are pushed into secondary poverty. One in five of those affected are children, showing the disproportionate harm from tobacco use facing youth. The Northern region also faces the largest increase of poverty, with a 2.66 percentage point increase, compared to 1.56 percentage points in the Central region and 0.66 percentage points in the Coastal region, worsening existing inequities. The findings also show that low-income households in the second income quintile increase their risk of falling into poverty from 7.15% to 16.13% with tobacco spending. For households in the lowest income quintile, tobacco use increases the poverty gap 1.53%. The working paper concludes with policy recommendations to reduce tobacco use through price- and non-price tobacco control strategies. 

A Policy Brief based on this working paper can be found here.