Background:
Opportunity costs of resources spent on tobacco are higher for low income households. This study assesses the financial impact of tobacco consumption on households' budgets in Argentina. First, it examines budget allocation among tobacco and other goods and services using a nationally representative household survey. Second, it explores the impact of tobacco consumption on the probability of having out-of-pocket expenditures on healthcare.

Methods:
We perform statistical analysis on the latest Household Expenditure Survey carried out by the National Institute of Statistics of Argentina in 2012/2013. This probabilistic, stratified, multistage sample contains information on consumer expenditures and socioeconomic characteristics of 20.960 urban households. Descriptive analysis of budget allocation by income quintile is performed first. Second, the impact of tobacco consumption on healthcare spending is assessed by a probit model. The dependent variable takes the value of 1 if the household had out-of-pocket health expenditures, and zero otherwise. Regressors include standard socioeconomic determinants of healthcare spending, such as presence of minor and senior members in the household, family income, medical insurance, sex, age, occupational status, and education.

Results:
Purchases of tobacco products represent 2.9% of total spending in households where at least one member consumes tobacco products. The proportion is higher in low-income households: it averages 3.3% in the bottom income quintile, and 2.2% in the top income quintile. Furthermore, the probit model shows that, other factors being held equal, having a smoker in the household increases the probability of out-of-pocket healthcare expenditures by 8.72% (95% CI: 4.87%-12.57%).

Conclusions:
Smoking imposes significant financial constraints on households' budgets. These constraints are more severe on low-income households, and may prevent them from escaping poverty by reducing resources available for long-term investments. This study provides evidence that an effective tobacco control policy may reduce disparities among socioeconomic groups beyond its well-known effects on health outcomes.