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

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Author Info
Gabriel A. Picone (Department of Economics, University of South Florida, Tampa, USA)
Frank Sloan
Justin G. Trogdon (School of Economics, University of Adelaide, Australia)

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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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File URL: http://hdl.handle.net/10.1002/hec.930
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Publisher 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 listed on IDEAS
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.:
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  3. Rosalie Liccardo Pacula, 1997. "Letter: Economic modelling of the gateway effect," Health Economics, John Wiley & Sons, Ltd., vol. 6(5), pages 521-524.
  4. Dee, Thomas S., 1999. "The complementarity of teen smoking and drinking," Journal of Health Economics, Elsevier, vol. 18(6), pages 769-793, December. [Downloadable!] (restricted)
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  8. Jonathan Gruber & Botond Koszegi, 2000. "Is Addiction "Rational"? Theory and Evidence," NBER Working Papers 7507, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. 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. [Downloadable!] (restricted)
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  11. Grossman, Michael & Chaloupka, Frank J & Sirtalan, Ismail, 1998. "An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels," Economic Inquiry, Oxford University Press, vol. 36(1), pages 39-48, January.
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  12. David M. Cutler & Jonathan Gruber & Raymond S. Hartman & M.B. Landrum, J. Newhouse & Meredith B. Rosenthal, 2000. "The Economic Impacts of the Tobacco Settlement," NBER Working Papers 7760, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Gabriel Picone & Frank Sloan, 2003. "Smoking Cessation and Lifestyle Changes," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 6(1), pages 1048-1048. [Downloadable!] (restricted)
  19. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 5-27, July. [Downloadable!] (restricted)
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  21. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. 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. [Downloadable!]
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  2. 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. [Downloadable!] (restricted)
  3. Requate, Till & Göhlmann, Silja & Tauchmann, Harald & Schmidt, Christoph M., 2006. "Tobacco and alcohol: complements or substitutes? : a statistical Guinea Pig approach," Economics Working Papers 2006,18, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
    Other versions:
  4. Kwabena Gyimah-Brempong, 2006. "Neighborhood income, alcohol availability, and crime rates," The Review of Black Political Economy, Springer, vol. 33(3), pages 21-44, March. [Downloadable!] (restricted)
  5. Pierpaolo Pierani & Silvia Tiezzi, 2009. "Addiction and interaction between alcohol and tobacco consumption," Empirical Economics, Springer, vol. 37(1), pages 1-23, September. [Downloadable!] (restricted)
  6. Tauchmann, Harald & Göhlmann, Silja & Requate, Till & Schmidt, Christoph M., 2008. "Tobacco and Alcohol: Complements or Substitutes? A Structural Model Approach," IZA Discussion Papers 3412, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Lex Borghans & Bart H. H. Golsteyn, 2005. "Time Discounting and the Body Mass Index," IZA Discussion Papers 1597, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. 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. [Downloadable!] (restricted)
  9. 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. [Downloadable!] (restricted)
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