Tobacco spending falls only for low-income smokers

Consumer spending on tobacco has nearly reached former levels as the effect of the tobacco price hike wears off, with only low-income smokers continuing to reduce spending on cigarettes, data showed Thursday.

According to numbers from Statistics Korea, the average household of two or more members spent 23,000 won each month on tobacco in the second quarter of this year. This marks a 10.9 percent increase from last year.

The data showed a significant difference in cigarette spending between high-income and low-income households.

The bottom 20 percent of households based on income spent 6.6 percent less than last year on tobacco, while the top 20 percent spent 25.3 percent more than last year.

Households that made more than 6 million won per month increased their tobacco spending by 27.4 percent, while households with a monthly income between 3 to 4 million won increased consumption by 22.7 percent. Tobacco spending in these two brackets have reached 2014 levels, before the government raised prices on cigarettes.

In 2015, the government raised the excise tax on cigarettes, raising the average price of a pack of cigarettes from 2,500 won to 4,500 won. The latest numbers suggest that the higher price, which was intended to reduce smoking, affected tobacco consumption only among lower-income smokers.

By Won Ho-jung (hjwon@heraldcorp.com)