LAUSR

Crowding-out effects of tobacco consumption refers to the situation in which tobacco consumption reduces a household’s spending on other commodities. In this paper, we test for the crowding-out effects of recreational tobacco consumption on food expenditures among on-reserve Indigenous communities in Canada. We use data from household expenditure surveys (N=469) to investigate tobacco consumption behaviour of on-reserve households of six First Nation communities in Canada. Using conditional Engel curves, we estimate the crowding-out effects of spending on tobacco on budget share of other expenditure categories with a focus on food expenditures. Our analysis showed that crowding-out effects of consuming tobacco on consumption of goods and services are minimal with an estimated impact of −0.00004 on the budget share of food expenditures in the remaining budget excess of expenditures on tobacco. While crowding-out effects are not statistically significant in general, the budget share of store-bought food expenditures is significantly lower (i.e. 5%) among tobacco consumer households. This study sheds new light on some of the indirect impacts of recreational tobacco use and Indigenous food insecurity in Canada. This study is the first attempt to test for crowding-out effects of tobacco consumption among Indigenous populations in Canada. Our findings are important and highlight areas for substantial improvements in health and well-being outcomes given the alarming rates of food insecurity experienced by Indigenous communities in Canada.