An empirical investigation of pan, tobacco and intoxicants consumption at household level in India

The present paper estimates the responsiveness of prices and household expenditure on consumption of three broad categories, i.e., pan, tobacco and intoxicants at household level in rural and urban areas of all India. Household level elasticities are estimated for the various deciles class (economic status) of families. The pattern shows that the rural household spending is proportionally more on pan than that of their urban counterparts. The expenditure on pan, tobacco and intoxicants at household level is inelastic. The marginal propensity to consume at household level for pan, tobacco and intoxicants is low in India. One rupee increase in the per capita expenditure will increase consumption of pan in rural region while for tobacco and intoxicants in urban region.