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The Economic Cost of Smoking: Differences in Wages between Smokers and Non-smokers in Russia

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  • Lokshin, Mikhail
  • Sajaia, Zurab

Abstract

This paper estimates the economic losses related to the negative effect of smoking on wages in Russia. Data from the 2006 Living Standards Survey of Russia’s Tomsk region are used to jointly estimate a system of three equations: the smoking decision equation and two separate equations for wages of smokers and non-smokers. The results show that, after controlling for observed characteristics and taking into account unobserved heterogeneity in personal characteristics, smoking has a substantial negative impact on wages of working men in Russia. It has been also shown that the effect of smoking on wages differs between males and females.

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File URL: http://pe.cemi.rssi.ru/pe_2007_2_60-80.pdf
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Bibliographic Info

Article provided by Publishing House "SINERGIA PRESS" in its journal Applied Econometrics.

Volume (Year): 6 (2007)
Issue (Month): 2 ()
Pages: 60-80

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Handle: RePEc:ris:apltrx:0146

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Web page: http://appliedeconometrics.cemi.rssi.ru/

Related research

Keywords: smoking; differences in wages;

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  1. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  2. Heineck, Guido & Schwarze, Johannes, 2003. "Substance Use and Earnings: The Case of Smokers in Germany," IZA Discussion Papers 743, Institute for the Study of Labor (IZA).
  3. Arzhenovskiy Sergey, 2005. "Socioeconomic determinants of smoking in contemporary Russia," EERC Working Paper Series 05-12e, EERC Research Network, Russia and CIS.
  4. Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1994. "An Empirical Analysis of Cigarette Addiction," NBER Working Papers 3322, National Bureau of Economic Research, Inc.
  5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, April.
  6. Frank J. Chaloupka, 1991. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc.
  7. Jenny Lye & Joe Hirschberg, 2004. "Alcohol consumption, smoking and wages," Applied Economics, Taylor and Francis Journals, vol. 36(16), pages 1807-1817.
  8. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  9. Kajal Lahiri & Jae G. Song, 2000. "The effect of smoking on health using a sequential self-selection model," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 491-511.
  10. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  11. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June.
  12. M. Christopher Auld, 2005. "Smoking, Drinking, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
  13. Michael Lokshin & Zurab Sajaia, 2004. "Maximum likelihood estimation of endogenous switching regression models," Stata Journal, StataCorp LP, vol. 4(3), pages 282-289, September.
  14. Lance, Peter M. & Akin, John S. & Dow, William H. & Loh, Chung-Ping, 2004. "Is cigarette smoking in poorer nations highly sensitive to price?: Evidence from Russia and China," Journal of Health Economics, Elsevier, vol. 23(1), pages 173-189, January.
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