Consumption of tobacco in India

Abstract

Tobacco has already become the predominant cause of preventable deaths in the world. newlineTobacco related illnesses have become a major factor contributing towards the high morbidity newlinein developing countries, where more than 82% of the world smokers reside. India, newlinethe second largest consumer of tobacco in the world, is no exception to the growing tobacco newlinemenace. Even the most conservative estimates put the tobacco attributable deaths in newlineIndia in the range of 800,000 to 900,000 a year. newlineA detailed review of literature revealed that studies on economic analysis of tobacco newlineconsumption, production and various other aspects have been hugely neglected in the Indian newlinecontext. Against this backdrop this thesis undertook a detailed analysis of following newlinethree major issues pertaining to tobacco consumption behavior among Indian households. newline1. Factors that influence household behavior on the decision to consume different tobacco newlineproducts newline2. Crowding out effects of tobacco spending on the consumption of other goods and its newlineeffects on overall welfare of the household. newline3. Own and cross-price responsiveness of various tobacco products and its implications newlinefor tobacco taxation policy newlineConsumption data collected by the National Sample Survey Organization in its surveys newlinefrom two time periods 55th round (July 1999 to June 2000) and 50th round (July 1993 to newlineJune 1994) was used for this purpose. The thesis begins by examining the prevalence of tobacco consumption in India and newlinefinds that tobacco use in varied forms is quite pervasive in the country. At least one member newlinefrom 62% rural and 40% of urban households in India report tobacco use in some form or newlineother as per the 55th round of NSS. It was also found that there is an immanent inequality newlinein the consumption of tobacco in India, with socially disadvantaged and poor households newlineconsuming more of lower quality tobacco products. newlineThe factors underlying households decision to consume different tobacco products newlinewere examined using a multinomial logit model. Many variables such as household