Socio-Economic Evolution and Tobacco Products Sales in Spain: A Long-Term Analysis of the Tobacco Kuznets Curve

Abstract

This article examines the relationship between economic development and tobacco consumption in Spain, using the Kuznets Curve framework. Drawing on panel data from Spanish provinces (2002–2021), the findings confirm that GDP has a non-linear effect on cigarette consumption. A 1% increase in GDP initially is positively associated with an increase in cigarette sales by 2.31%, but at higher income levels, cigarettes sales decrease (−0.24%), reflecting changing consumption dynamics as economies develop, which corroborates the existence of the Tobacco Kuznets Curve (TKC). Beyond GDP, we examine the role of unemployment in shaping tobacco consumption patterns, focusing on product substitution effects. Unlike its negative impact on cigarette sales (−0.075%), unemployment has a positive effect on Roll-Your-Own (RYO), pipe tobacco, and cigars. A 1% increase in unemployment raises sales of these alternative products by 0.31%, 0.48% and 0.29%, respectively, suggesting that economic downturns push consumers toward cheaper substitutes, also perceived as less harmful, rather than leading to a complete reduction in tobacco use. The inclusion of real cigarette prices confirms that higher prices—often driven by taxation—are associated with reduced cigarette sales and a shift toward alternative tobacco products, supporting evidence of a substitution effect during periods of economic downturns. Additionally, factors such as life expectancy and demographic aging significantly influence consumption patterns across all tobacco products. These findings highlight the need for differentiated anti-smoking policies, as uniform regulations may fail to address product-specific shifts driven by economic cycles.