April 1, 2012

Household Spending on Alcohol and Tobacco

I used to smoke cigarettes but I quit several years ago.   That habit cost me thousands of dollars over the years.   I am probably classified as a 'social drinker'.   I don't drink alcohol regularly but I am known to have a drink now and then.   But honestly at this point I cant remember the last time I actually had any alcohol and its probably been at least a couple years.   This is one area that I spend a lot less than average compared to most Americans.

The average American household spent $412 on alcohol and $362 on tobacco products in 2010.

That figure is from the BLS Consumer Expenditure Survey data for 2010.   They also have the spending broken down by income quintiles. 

First of all is the total dollar spending :

As you can see the amount spent on alcohol goes up increasingly with income.   Most Americans drink alcohol of some form.   Interestingly  a Gallup poll found that the percent of people who drink alcohol increases with income.   So part of the increased spending is due to more people drinking.  I would also assume the increased spending is due to purchase of higher cost alcohol.   On the other hand tobacco spending peaks in the middle quintile and is lowest in the highest quintile.   I would assume here that the spending amount is based mostly on what percent of the people in the quintile are tobacco users.

Its important to point out that the average spending figures here include all households including those that do and do not drink alcohol or smoke tobacco.   Only about 20% or so of Americans smoke tobacco so most households would have a $0 expenditure on tobacco.  However if you average in the spending that the 20% or so do incur from tobacco then you end up with the averages given.   On the other hand over 60% of Americans drink alcohol, so most households do have spending on alcohol.   Most of them do so in moderation but some people have a problem and they should look into how to get sober from alcoholism. 

Now lets look at the spending as a % of the average income for the quintile:

For both alcohol and tobacco the spending as a % of the household income goes down as incomes increase.  Lower income households spend nearly 5% of their total income on alcohol and tobacco while the highest quintile spends just about 0.7%.  

Portions of this article sponsored by Drug Treatment.com.

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