The purpose of this study was to explain the impact of cigarette expenditure on household expenditure in the urban area. To achieve the purpose, this study explored the ratio of the expenditure items in the household and found the impact of cigarette expenditure on other household expenditure such as alcohol, food, housing, utility, household goods, clothing, medical expense, education, entertainment, transportation, other items by using flogit analysis. This study used raw data of the 2004 Korean Urban Households' Expenditure Survey. The results of this study were as follows: First, the total consumption expenditure was 2.4 million won and the ratio of cigarette expenditure was 1.9%. The effect of cigarette was found to significantly influence most expenditure items and the degree of effect was much bigger in the higher tobacco consumption group than in the lower consumption group. Especially, some expenditure items in the household such as housing, household goods, clothing, medical expense, education, entertainment would be more likely to be decreased as cigarette expenditure increased. Thus, other family members might give up spending the household income for themselves since cigarette expenditure influenced negatively to other expenditure categories.