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The effect of the tobacco settlement and smoking bans on alcohol consumption

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  • Gabriel A. Picone

    (Department of Economics, University of South Florida, Tampa, USA)

  • Frank Sloan
  • Justin G. Trogdon

    (School of Economics, University of Adelaide, Australia)

Abstract

In the last few years, the price of cigarettes has increased considerably in the USA. In addition, a number of states have also imposed smoking bans. These increases in the cost and barriers to smoking have created a natural experiment to study relationships between smoking and drinking behaviors. In this study, we employ data from the first six waves of the Health and Retirement Survey (HRS) to analyze the effects of smoking bans and cigarette prices on alcohol consumption. We also test if past cigarette and alcohol consumption affect current alcohol consumption as predicted by co-addiction models. We estimate dynamic panel models using GMM estimators. Our approach allows us to obtain consistent estimates irrespective of the number of time periods. The three main findings of this study are: (1) there is positive reinforcement effect of past cigarette consumption on current alcohol consumption, (2) smoking bans reduce alcohol consumption and (3) there is a positive effect of cigarette prices on alcohol consumption. Copyright © 2004 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 13 (2004)
Issue (Month): 10 ()
Pages: 1063-1080

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Handle: RePEc:wly:hlthec:v:13:y:2004:i:10:p:1063-1080

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References

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Citations

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Cited by:
  1. Borghans, Lex & Golsteyn, Bart H.H., 2006. "Time discounting and the body mass index: Evidence from the Netherlands," Economics & Human Biology, Elsevier, Elsevier, vol. 4(1), pages 39-61, January.
  2. Maurice J.G. Bun & Frank Windmeijer, 2007. "The Weak Instrument Problem of the System GMM Estimator in Dynamic Panel Data Models," Bristol Economics Discussion Papers 07/595, Department of Economics, University of Bristol, UK.
  3. Christopher Carpenter, 2007. "How Do Workplace Smoking Laws Work? Quasi-Experimental Evidence from Local Laws in Ontario, Canada," NBER Working Papers 13133, National Bureau of Economic Research, Inc.
  4. Harald Tauchmann & Silja Lenz & Till Requate & Christoph Schmidt, 2013. "Tobacco and alcohol: complements or substitutes?," Empirical Economics, Springer, Springer, vol. 45(1), pages 539-566, August.
  5. Göhlmann, Silja & Requate, Till & Schmidt, Christoph M & Tauchmann, Harald, 2008. "Tobacco and Alcohol: Complements or Substitutes? A Structural Model Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6780, C.E.P.R. Discussion Papers.
  6. Sara Markowitz & John Tauras, 2009. "Substance use among adolescent students with consideration of budget constraints," Review of Economics of the Household, Springer, Springer, vol. 7(4), pages 423-446, December.
  7. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers, American Association of Wine Economists 164652, American Association of Wine Economists.
  8. Dhaval Dave & Henry Saffer, 2007. "Risk Tolerance and Alcohol Demand Among Adults and Older Adults," NBER Working Papers 13482, National Bureau of Economic Research, Inc.
  9. Pierpaolo Pierani & Silvia Tiezzi, 2009. "Addiction and interaction between alcohol and tobacco consumption," Empirical Economics, Springer, Springer, vol. 37(1), pages 1-23, September.
  10. Koksal, Aycan & Wohlgenant, Michael, 2013. "Pseudo Panel Data Estimation Technique and Rational Addiction Model: An Analysis of Tobacco, Alcohol and Coffee Demands," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150457, Agricultural and Applied Economics Association.
  11. Borghans,Lex & Golsteyn,Bart H.H., 2005. "Time Discounting and the Body Mass Index," ROA Research Memorandum, Maastricht University, Research Centre for Education and the Labour Market (ROA) 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  12. Kwabena Gyimah-Brempong, 2006. "Neighborhood income, alcohol availability, and crime rates," The Review of Black Political Economy, Springer, Springer, vol. 33(3), pages 21-44, March.
  13. Michael T. Owyang & E. Katarina Vermann, 2012. "Where there’s a smoking ban, there’s still fire," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue July, pages 265-286.
  14. Sara Markowitz & John Tauras, 2006. "Even For Teenagers, Money Does Not Grow on Trees: Teenage Substance Use and Budget Constraints," NBER Working Papers 12300, National Bureau of Economic Research, Inc.
  15. Harald Tauchmann & Silja Göhlmann & Till Requate & Chistoph M. Schmidt, 2006. "Tobacco and Alcohol: Complements or Substitutes? - A Statistical Guinea Pig Approach," RWI Discussion Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung 0052, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  16. Koksal, Aycan & Wohlgenant, Michael, 2013. "Interdependence of Tobacco and Alcohol Consumption: A Natural Experiment Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150459, Agricultural and Applied Economics Association.
  17. Maurice J.G. Bun & Frank Windmeijer, 2009. "The Weak Instrument Problem of the System GMM Estimator in Dynamic Panel Data Models," Tinbergen Institute Discussion Papers, Tinbergen Institute 09-086/4, Tinbergen Institute.

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