Smoking households divert 11% of their budget to buy cigarettes and other tobacco products. Tobacco spending could be deemed as wasteful spending for three main reasons: (1) it does not contribute to calorie intake, (2) it diverts resources from spending on essential commodities, and (3) it adversely affects one’s health and potentially increases health care spending and reduces productivity. Suppose direct tobacco spending and smoking-attributed health care costs are deemed forgone resources and excluded from the total household expenditure. In that case, there is a possibility that tobacco-spending households would fall below the poverty line. This study finds that the poor population would increase by 8.8 million people if household spending were adjusted for the wasteful spending related to tobacco use.