Tobacco and alcohol: complements or substitutes?
AbstractThe question of whether alcohol and tobacco are consumed as complements or substitutes is crucial for determining the side-effects of anti-smoking policies. Numerous papers have empirically addressed this issue by estimating demand systems for alcohol and tobacco, and subsequently calculating cross-price effects. However, this traditional approach is often seriously hampered by insufficient price variation observed in survey data. We, therefore, suggest an alternative instrumental variables approach that statistically mimics an experimental study and does not rely on prices as explanatory variables. This approach is applied by means of German survey data. Our estimation results suggest that a reduction in tobacco consumption results in a moderate reduction in alcohol consumption. It is demonstrated that this implies that alcohol and tobacco are complements. Hence, we conclude that successful anti-smoking policies will not result in the unintended side-effect of an increased (ab)use of alcohol. Copyright Springer-Verlag 2013
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Empirical Economics.
Volume (Year): 45 (2013)
Issue (Month): 1 (August)
Contact details of provider:
Postal: Stumpergasse 56, A-1060 Vienna
Phone: ++43 - (0)1 - 599 91 - 0
Fax: ++43 - (0)1 - 599 91 - 555
Web page: http://link.springer.de/link/service/journals/00181/index.htm
More information through EDIRC
Find related papers by JEL classification:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- I12 - Health, Education, and Welfare - - Health - - - Health Production
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bask, Mikael & Melkersson, Maria, 2001.
"Rationally Addicted to Drinking and Smoking?,"
UmeÃ¥ Economic Studies
567, Umeå University, Department of Economics.
- Murphy, Kevin M & Topel, Robert H, 2002.
"Estimation and Inference in Two-Step Econometric Models,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 20(1), pages 88-97, January.
- Murphy, Kevin M & Topel, Robert H, 1985. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 370-79, October.
- Gabriel M. Ahlfeldt & Wolfgang Maennig, 2010.
"Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany,"
Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik),
Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(5), pages 506-521, October.
- Gabriel Ahlfeldt & Wolfgang Maennig, 2009. "Impact of Non-Smoking Ordinances on Hospitality Revenues: The Case of Germany," Working Papers 026, Chair for Economic Policy, University of Hamburg.
- Joshua Angrist & Alan Krueger, 2001.
"Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments,"
834, Princeton University, Department of Economics, Industrial Relations Section..
- Joshua D. Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 69-85, Fall.
- Joshua Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," NBER Working Papers 8456, National Bureau of Economic Research, Inc.
- Davis, George C. & Kim, Sung-Yong, 2002. "Measuring instrument relevance in the single endogenous regressor-multiple instrument case: a simplifying procedure," Economics Letters, Elsevier, vol. 74(3), pages 321-325, February.
- Michael Kvasnicka & Harald Tauchmann, 2010.
"Much Ado About Nothing? – Smoking Bans and Germany’s Hospitality Industry,"
Ruhr Economic Papers
0172, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Michael Kvasnicka & Harald Tauchmann, 2012. "Much ado about nothing? Smoking bans and Germany's hospitality industry," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4539-4551, December.
- Steven T. Yen, 2005. "A Multivariate Sample-Selection Model: Estimating Cigarette and Alcohol Demands with Zero Observations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 453-466.
- Christian Bantle & John P. Haisken-DeNew, 2002. "Smoke Signals: The Intergenerational Transmission of Smoking Behavior," Discussion Papers of DIW Berlin 277, DIW Berlin, German Institute for Economic Research.
- Dee, Thomas S., 1999. "The complementarity of teen smoking and drinking," Journal of Health Economics, Elsevier, vol. 18(6), pages 769-793, December.
- Cameron, Lisa & Williams, Jenny, 2001. "Cannabis, Alcohol and Cigarettes: Substitutes or Complements?," The Economic Record, The Economic Society of Australia, vol. 77(236), pages 19-34, March.
- Nelson, Forrest & Olson, Lawrence, 1978. "Specification and Estimation of a Simultaneous-Equation Model with Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 695-709, October.
- Gabriel A. Picone & Frank Sloan & Justin G. Trogdon, 2004. "The effect of the tobacco settlement and smoking bans on alcohol consumption," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 1063-1080.
- Imbens, Guido W & Angrist, Joshua D, 1994.
"Identification and Estimation of Local Average Treatment Effects,"
Econometric Society, vol. 62(2), pages 467-75, March.
- Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
- Labeaga, Jose M., 1999. "A double-hurdle rational addiction model with heterogeneity: Estimating the demand for tobacco," Journal of Econometrics, Elsevier, vol. 93(1), pages 49-72, November.
- Jones, Andrew M, 1989. "A Systems Approach to the Demand for Alcohol and Tobacco," Bulletin of Economic Research, Wiley Blackwell, vol. 41(2), pages 85-105, April.
- Hoderlein, Stefan & Mihaleva, Sonya, 2008. "Increasing the price variation in a repeated cross section," Journal of Econometrics, Elsevier, vol. 147(2), pages 316-325, December.
- Jenny Williams & Rosalie Liccardo Pacula & Frank J. Chaloupka & Henry Wechsler, 2001.
"Alcohol and Marijuana Use Among College Students: Economic Complements or Substitutes?,"
NBER Working Papers
8401, National Bureau of Economic Research, Inc.
- J. Williams & Rosalie Liccardo Pacula & Frank J. Chaloupka & Henry Wechsler, 2004. "Alcohol and marijuana use among college students: economic complements or substitutes?," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 825-843.
- Xueyan Zhao & Mark N. Harris, 2004. "Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross-equation Correlations," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 394-410, December.
- Pierpaolo Pierani & Silvia Tiezzi, 2009. "Addiction and interaction between alcohol and tobacco consumption," Empirical Economics, Springer, vol. 37(1), pages 1-23, September.
- Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
- Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
- MacDonald, Ziggy & Shields, Michael A, 2001.
"The Impact of Alcohol Consumption on Occupational Attainment in England,"
London School of Economics and Political Science, vol. 68(271), pages 427-53, August.
- MacDonald, Ziggy & Shields, Michael A., 2000. "The Impact of Alcohol Consumption on Occupational Attainment in England," IZA Discussion Papers 166, Institute for the Study of Labor (IZA).
- Shew-Jiuan Su & Steven Yen, 2000. "A censored system of cigarette and alcohol consumption," Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 729-737.
- James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
- Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If references are entirely missing, you can add them using this form.