- Project title: The impact of tobacco, alcohol, and beer consumption on poverty and crowding-out effects in Vietnam.
- Code number: B2024-TNA-22.
- Coordinator: Assoc. Prof. Dr. Nguyen Thi Thu Thuong
- Implementing institution: Thai Nguyen University
- Duration: January 2024 – January 2026 (extended to June 2026)
2. Objectives
2.1. Common objective
The project is conducted to analyze the impacts of tobacco, alcohol, and beer consumption on poverty in Vietnam, as well as the crowding-out effects of the use of these goods on household expenditure for other goods and services. On that basis, the study proposes recommendations to mitigate the effects of these goods on the impoverishment of households in Vietnam.
2.2. Specific objectives
- To clarify the theoretical foundations and practical experience regarding the impacts of tobacco, alcohol, and beer consumption on poverty and crowding-out effects.
- To assess the impacts of tobacco, alcohol, and beer consumption on poverty in Vietnam.
- To analyze the crowding-out effects of tobacco, alcohol, and beer consumption on the budget allocation of Vietnamese households.
- To propose solutions and policy recommendations to reduce the negative impacts of tobacco, alcohol, and beer consumption on poverty and crowding-out effects in Vietnam by 2030.
3. Novelty and innovation
- The study developed an integrated analytical framework for examining the impacts of expenditure on tobacco, alcohol, and beer on impoverishment and crowding-out effects in household budget allocation in Vietnam. The framework goes beyond a public health perspective and treats these products as expenditure items that may reduce household economic welfare.
- The study simultaneously analyzes three categories of effects: expenditure on tobacco, expenditure on alcohol and beer, and concurrent expenditure on tobacco, alcohol, and beer. This is a novel feature compared with many previous studies, which have typically focused only on tobacco or only on alcohol and beer, while in reality these consumption behaviors may be complementary and jointly place pressure on household budgets.
- The study quantified the impoverishing effects of tobacco, alcohol, and beer using indicators such as the poverty rate, the additional number of poor people, and the poverty gap. At the same time, it takes into account both direct expenditure on tobacco, alcohol, and beer and attributable medical costs, thereby providing a more comprehensive picture of the channels through which these goods affect household welfare. The analysis covers differences by geographic region, area of residence, and income group over the period 2014–2022. This approach helps identify vulnerable groups more clearly, particularly low-income households, rural households, and households in the Northern Midlands and Mountains, the Central Highlands, and the Mekong River Delta.
- The study also examined the crowding-out effects of expenditure on tobacco, alcohol, and beer across a wide range of essential spending categories, including food, healthcare, education, housing, transportation, communication, fuel and gas, durable goods, and recreation. The findings help clarify the mechanisms through which spending on harmful goods may reduce the resources available for basic needs and human development investment.
- Methodologically, the study uses multi-year data from the Vietnam Household Living Standards Survey, including the 2014, 2016, 2018, 2020, and 2022 rounds. The use of repeated survey waves allows the study to analyze trends over time and to examine changes under different socio-economic conditions in Vietnam.
- The study applies modern econometric methods, particularly an instrumental variables approach combined with GMM-3SLS, in order to address endogeneity, contemporaneous correlation among expenditure equations, and heteroskedasticity in household budget allocation analysis.
- The study demonstrates the regressive nature of the impacts of tobacco, alcohol, and beer expenditure: low-income and vulnerable households are affected more severely than high-income households. This finding shows that controlling tobacco, alcohol, and beer consumption is not only a public health issue, but also directly related to poverty reduction and the protection of household welfare.
- Based on the research findings, the project proposes a system of solutions and policy recommendations up to 2030, following an integrated approach that combines control of tobacco, alcohol, and beer consumption with household financial protection, sustainable poverty reduction, and the mitigation of crowding-out effects on essential expenditures.
- Based on an overview of research studies and empirical research models, the study has established an empirical research framework on factors affecting CHE of households in the Northern midlands and mountainous areas, and a framework to analyze the causal relationship between health insurance and CHE of households in the region.
4. Research results
- The study has systematized the theoretical foundations and reviewed the empirical literature on the impacts of expenditure on tobacco, alcohol, and beer on impoverishment and crowding-out effects in household budget allocation. On that basis, the study clarifies the mechanisms through which spending on these harmful goods may reduce disposable income, increase health-related burdens, and diminish the resources available for essential household needs in Vietnam.
- The study assessed the current situation of expenditure on tobacco, alcohol, and beer, as well as concurrent expenditure on these items in Vietnam, by geographic region and income group over the period 2014-2022. The results show that the proportion of households spending on tobacco tended to decline over time, but remained high and varied markedly across regions; the Northern Midlands and Mountains consistently recorded the highest rate, while the South East had the lowest. For alcohol and beer, the proportion of households reporting such expenditure remained very common, was generally higher in rural than in urban areas, and increased with income. Concurrent expenditure on tobacco, alcohol, and beer was also widespread, especially in the northern and central regions, while the South East and the Mekong River Delta showed relatively lower levels.
- The study analyzed the impact of tobacco, alcohol, and beer consumption on poverty in Vietnam through two channels: direct expenditure on these products and attributable medical costs. The results show that, once tobacco-, alcohol-, and beer-related expenditures are excluded, the poverty rate, the number of poor people, and the poverty gap all increase in every study year. Direct expenditure is the main channel of impoverishment, while attributable medical costs constitute an additional channel that further aggravates the risk of impoverishment. This effect declined gradually during 2014-2020 but increased again in 2022.
- The study also revealed clear variation in the impoverishing effects across geographic regions and income groups. The strongest effects were found in the Central Highlands, the Northern Midlands and Mountains, and in some years the Mekong River Delta, whereas the Red River Delta and the South East showed lower impacts. Across income groups, the impoverishing effect was clearly regressive: low-income groups were the most affected, middle-income groups were moderately affected, and high-income groups were the least affected. This indicates that expenditure on tobacco, alcohol, and beer reduces the disposable resources of poor and near-poor households more severely.
- The project quantified the crowding-out effects of expenditure on tobacco, alcohol, and beer on household budget allocation in Vietnam. The estimation results show that spending on tobacco and alcohol/beer reduces the budget share allocated to many essential expenditure categories, especially food and education; in some cases, it also increases the share spent on healthcare and complementary goods. The crowding-out effect is generally more pronounced among low-income households, indicating that harmful goods not only increase the risk of impoverishment but also adversely alter the expenditure structure of vulnerable households.
- Based on the empirical findings, the project proposed a system of solutions and policy recommendations up to 2030 to reduce the negative impacts of tobacco, alcohol, and beer consumption on poverty and crowding-out effects in Vietnam. The main groups of solutions include: improving tax and pricing policies; reallocating part of tax revenue to primary healthcare, education, and poverty reduction; strengthening behavior-change communication; integrating tobacco, alcohol, and beer control into multidimensional poverty reduction policies; prioritizing interventions in rural areas, disadvantaged regions, and low-income groups; and expanding cessation support services while improving control over product accessibility.
5. Products
5.1. Scientific products
* 01 paper published in the journal indexed in Scopus Q1 list
[1]. Nguyen Thị Thu Thuong, Dinh Hong Linh (2026), “Does tobacco spending crowd out the household budget in Vietnam? Evidence from Vietnam household living standards survey 2014–2020” Social Sciences & Humanities Open, Scopus Q1, ISSN: 2590-2911, 13 (2026), 102423.
* 03 papers published in the Vietnamese journals
[1] Nguyen Thi Thu Thuong, Bui Nhat Ha, Nguyen Tien Long, Le Thi Hoai Anh, Nguyen Manh Hung (2025), “The impact of tobacco smoking on the economic burden of patients seeking medical care at Thai Nguyen Central Hospital”, Journal of Economics and Business Administration, ISSN 2525-2569, No. 32 (2025), pp. 147–156.
[2] Nguyen Thi Thu Thuong, Nguyen Thi Thuy Van, Ngo Thi My, Nguyen Thi Phuong Hao, Duong Thi Nhung (2025), “The crowding-out effect of alcohol and beer expenditure in the Northern Midlands and Mountainous Region”, Economy & Forecast Review Journal, ISSN 1859-4972, No. 2 (2025), pp. 522–525.
[3] Nguyen Thi Thu Thuong, Nguyen Hong Lien, Ha Thi Minh Hue, Le Thi Thuy An, Duong Thuy Linh (2026), “Factors affecting tobacco expenditure among households in Vietnam: empirical evidence from a censored regression model”, Journal of Economics and Business Administration, ISSN 2525-2569, No. 36 (2026), pp. 146–156.
5.2. Training products
Supervised one master’s student in completing a thesis.
[1] Bui Nhat Ha (2025), “Analysis of the financial burden related to tobacco smoking among patients receiving medical examination and treatment at Thai Nguyen Central Hospital”, Master’s thesis, University of Economics and Business Administration – Thai Nguyen University.
5.3. Application products
The project has completed three recommendation reports:
[1] Report on assessing the impacts of tobacco use, alcohol and beer consumption, and the combined use of tobacco, alcohol, and beer on poverty in Vietnam by geographic region and income group.
[2] Report on analyzing the crowding-out effects of tobacco expenditure, alcohol and beer expenditure, and the combined expenditure on tobacco, alcohol, and beer on household budget allocation in Vietnam.
[3] Report proposing solutions and policy recommendations to reduce the negative impacts of tobacco, alcohol, and beer consumption on poverty and crowding-out effects in Vietnam by 2030.
6. Modes of transfer, application addresses, impacts, and benefits of the research results
6.1. Modes of transfer
The research results of the project have been developed into a recommendation report and made publicly available. All individuals and organizations may access and consult them.
6.2. Application addresses
The research results of the project can be used by state management agencies at both central and local levels to implement poverty reduction strategies more effectively, improve the health status and welfare of households, and promote more sustainable consumption behavior.
6.3. Impacts and benefits of the research results
For education and training.
The report will serve as a valuable reference for lecturers, researchers, and learners in Economics, Development Economics, and Economic Management at universities and colleges. It will also provide a basis for strengthening exchanges among lecturers, researchers, and other interested readers.
For related fields of science and technology.
The research content will contribute to the development of economic science, policy design and formulation, research on sustainable consumption behavior, and social protection systems.
For socio-economic development
The report will be a valuable reference for policymakers from the central to local levels in formulating policies to reduce the impacts of tobacco, alcohol, and beer consumption on household poverty, and to improve the health status and welfare of households in Vietnam.
For the host institution and institutions applying the research results.
The project enriches the body of knowledge, enhances the research experience and scientific skills of academic staff, and increases the number of basic research projects in the social sciences. With its expected outputs, the project will contribute to enhancing the role and standing of Thai Nguyen University in general, and Thai Nguyen University of Economics and Business Administration in particular, in scientific research at both national and international levels.
For institutions applying the research results, the project will serve as a useful reference for policymakers, contributing to more effective poverty reduction and to improving the health status and welfare of households through more sustainable consumption behavior.
