The purpose of this updated research on tobacco use and poverty was to investigate the consumption behavior of Cambodian households for specific product groups (food, clothing, education, medical care, housing and tobacco) taking into account the impact of tobacco spending. The investigation was conducted in the framework of the consumer demand theory using one of the most common functional forms of econometric analysis: the Almost Ideal Demand System. The advantage of this approach is the possibility to compute expenditure (income) elasticity, own price and cross price elasticity using the results of the maximum likelihood estimation of demand model under the study.
Section One of this report presents the study objectives. Section Two is a review of the research literature. Section Three describes the data sources and methodology. Section Four highlights some of the socio-demographic characteristics of Cambodian households. Section Five demonstrates a striking difference between non-tobacco consuming families and tobacco consuming ones. Section Six highlights the core subject of the study: the tobacco or health dilemma. It also shows the opportunity cost of tobacco consumption and its related health risk. Section Seven presents the results of the regression analysis. Finally, a conclusion and recommendations related to policy implications are detailed in Section Eight, which concludes the paper.