There’s a concept in economics of substitute goods. Basically if the demand one for one product goes, demand for another goes down.
If pasta becomes super popular then you might see sales in couscous go down (substitute good). Other products though, such as tomato sauce, may instead go up in demand (complementary goods).
Anyway, two conversations last week made me think there might be such a relationship going on between two slightly contentious products in East Africa, which could have some interesting implications…
Sugary tobacco
I’ve just finished a book about the sugar industry. The guy basically blames sugar for everything. Anyway, one of the tidbits of information was how it was sugar which caused the tobacco industry to take off.
Before then tobacco was only smoked in cigars or chewed. The alkaline nature of tobacco in this form meant it was too harsh for people to inhale and so the smoke was (still is) kept in people’s mouths rather than drawn into their lungs.
Someone noticed that if the tobacco leaves were doused in sugary water the alkaline issue went away, people could inhale a less harsh smoke and then boom – mass-market cigarettes were born.
This anecdote led my friend and I to say, how, comparatively, countries in East Africa were pretty low on the global cigarettes per capita consumption rankings.
Frictionless sports betting
A big craze in Kenya is people (mainly young men) spending a high portion of their low income betting on the results of football games.
There always seem to be an inclination for people to bet, but with the ease at which mobile money can facilitate betting, the behaviour has absolutely taken off. Rather than needing to go and visit a betting shop, people can guess the score of a match whilst on a matatu, or sitting around with friends in the pub.
I don’t have specific numbers, but Kenya certainly seems to be the most extreme version of this, compared to other African countries.
The need for a micro vice
People in East Africa will buy things in small amounts. It’s rare someone would buy a whole pack of cigarettes, instead they’d pay 10p for a single fag.
Whilst there’ll be some pleasure derived in the cigarette, it also seems that the purchase plays the role of a small thing which isn’t good for you. For me, this might be having a beer or some chocolate at the end of evening.
The question I’m wondering is, does the low level of cigarette smoking and high level of sports betting suggest that the two are substitute goods?
Save our lungs – promote gambling!
If so, this brings forward an interesting policy proposition that we should be promoting sports betting as a means to stop people getting lung cancer.
Of course sports betting comes with its own unpleasantries and I’m sure someone could come up with the relative (detrimental) effects of both activities.
Maybe the key to an effective global health policy is to find something that fits in with the “micro vice” category, but is not as detrimental to people’s health, wealth or mental well-being.
Actual studies on this
I’ve Googled it for a couple of minutes and there wasn’t much.
Interestingly this study recommended adolescents who had gambling addictions to take up smoking, and there was a small study done in central Canada that measured gambling rates in countries that introduced a smoking ban. Most other studies seem to link both activities to income which somewhat misses the substitution effect.
If anyone knows someone looking for an academic thesis to go into then this topic seems like it has all the ingredients for a interesting/ impactful study. Feel free to put them in touch.