Chelwa, GrieveKoch, Steven F.2020-07-142020-07-142019-09-06Chelwa G., Koch S.F. The effect of tobacco expenditure on expenditure shares in South African households: A genetic matching approach. PLoS One 2019, 14(9): e0222000. https://DOI.org/10.1371/journal.pone.0222000.1932-6203 (online)10.1371/journal.pone.0222000http://hdl.handle.net/2263/75209S1 Fig. Densities of household income and expenditure after one-to-one genetic matching for Quartile 1. Panel (a) illustrates the density for the natural log of household income after matching. Panel (b) does the same for the natural log of household expenditure net of tobacco purchases.S2 Fig. Densities of household income and expenditure after one-to-one genetic matching for Quartile 2. Panel (a) illustrates the density for the natural log of household income after matching. Panel (b) does the same for the natural log of household expenditure net of tobacco purchases.S3 Fig. Densities of household income and expenditure after one-to-one genetic matching for Quartile 3. Panel (a) illustrates the density for the natural log of household income after matching. Panel (b) does the same for the natural log of household expenditure net of tobacco purchases.S4 Fig. Densities of household income and expenditure after one-to-one genetic matching for Quartile 4. Panel (a) illustrates the density for the natural log of household income after matching. Panel (b) does the same for the natural log of household expenditure net of tobacco purchases.S1 Table. Descriptive statistics before matching for Quartile 1 2010.S2 Table. Descriptive statistics after matching for Quartile 1 2010.S3 Table. Descriptive statistics before matching for Quartile 2 2010.S4 Table. Descriptive statistics after matching for Quartile 2 2010.S5 Table. Descriptive statistics before matching for Quartile 3 2010.S6 Table. Descriptive statistics after matching for Quartile 3 2010.S7 Table. Descriptive statistics before matching for Quartile 4 2010.S8 Table. Descriptive statistics after matching for Quartile 4 2010.This paper examines whether tobacco expenditure leads to the crowding out or crowding in of different expenditure items in South Africa. We apply genetic matching to expenditure quartiles of the 2010/2011 South African Income and Expenditure Survey. Genetic matching is a more appealing approach for dealing with the endogeneity of tobacco expenditure that often plagues studies using systems of demand equations. Further, genetic matching provides transparent measures of covariate balance giving the analyst objective means of assessing match success. We find that the poorest tobacco consuming households in South Africa consistently allocate smaller budget shares towards food items than non-smoking households. Specifically, we find that dairy, fruits, nuts and oils are displaced in favour of tobacco expenditure in the two poorest quartiles. Unsurprisingly, food items are never displaced for households in the top two quartiles, given these households’ greater access to resources. Like other studies in the literature, we find that tobacco expenditure consistently crowds-in alcohol across all quartiles confirming the strong complementarities between the two.en© 2019 Chelwa, Koch. This is an open access article distributed under the terms of the Creative Commons Attribution License.Tobacco expenditureSouth Africa (SA)Genetic matchingArticle