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Do Smokers Respond To Health Shocks?

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Author Info
V. Kerry Smith
Donald H. Taylor
Frank A. Sloan
F. Reed Johnson
William H. Desvousges

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Abstract

This paper reports the first effort to use data to evaluate how new information, acquired through exogenous health shocks, affects people's longevity expectations. We find that smokers react differently to health shocks than do those who quit smoking or never smoked. These differences, together with insights from qualitative research conducted along with the statistical analysis, suggest specific changes in the health warnings used to reduce smoking. Our specific focus is on how current smokers responded to health information in comparison to former smokers and nonsmokers. The three groups use significantly different updating rules to revise their assessments about longevity. The most significant finding of our study documents that smokers differ from persons who do not smoke in how information influences their personal longevity expectations. When smokers experience smoking-related health shocks, they interpret this information as reducing their chances of living to age 75 or more. Our estimated models imply smokers update their longevity expectations more dramatically than either former smokers or those who never smoked. Smokers are thus assigning a larger risk equivalent to these shocks. They do not react comparably to general health shocks, implying that specific information about smoking-related health events is most likely to cause them to update beliefs. It remains to be evaluated whether messages can be designed that focus on the link between smoking and health outcomes in ways that will have comparable effects on smokers' risk perceptions. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog

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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 83 (2001)
Issue (Month): 4 (November)
Pages: 675-687
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Handle: RePEc:tpr:restat:v:83:y:2001:i:4:p:675-687

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  1. Fabrice Etilé, 2006. "Who does the hat fit? Teenager heterogeneity and the effectiveness of information policies in preventing cannabis use and heavy drinking," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 697-718. [Downloadable!]
  2. Henrik Hammar & Fredrik Carlsson, 2005. "Smokers' expectations to quit smoking," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 257-267. [Downloadable!]
  3. Hammar, Henrik & Carlsson, Fredrik, 2001. "Smokers' Decisions To Quit Smoking," Working Papers in Economics 59, Göteborg University, Department of Economics. [Downloadable!]
  4. Andrew Clark & Fabrice Etilé, 2003. "Health Changes and Smoking: An Economic Analysis," DELTA Working Papers 2003-13, DELTA (Ecole normale supérieure). [Downloadable!]
  5. V. Kerry Smith & Donald H. Taylor Jr. & Frank A. Sloan, 2001. "Longevity Expectations and Death: Can People Predict Their Own Demise?," American Economic Review, American Economic Association, vol. 91(4), pages 1126-1134, September. [Downloadable!] (restricted)
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  6. Jin-Tan Liu & Meng-Wen Tsou & James Hammitt, 2007. "Health Information and Subjective Survival Probability: Evidence from Taiwan," NBER Working Papers 12864, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Mark Agee & Thomas Crocker, 2007. "Children’s health benefits of reducing environmental tobacco smoke exposure: evidence from parents who smoke," Empirical Economics, Springer, vol. 32(1), pages 217-237, April. [Downloadable!] (restricted)
  8. Alexander Ludwig & Alexander Zimper, 2007. "A Parsimonious Model of Subjective Life Expectancy," MEA discussion paper series 07154, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
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