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The effect of smoking on health using a sequential self-selection model

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  • Kajal Lahiri

    (Department of Economics, State University of New York at Albany, USA)

  • Jae G. Song

    (Department of Economics, State University of New York at Albany, USA)

Abstract

We estimate a structural model of individual smoking behaviour emphasizing the role of individual risk belief on smoking choices. Our model consists of five equations: two selection equations for initiation and cessation decisions, and three switching outcome regressions for nonsmokers, ex-smokers, and current smokers. The presence of significant self-selectivity implies that the health effects of smoking based on sample proportions do not correctly indicate the true risk of cigarette smoking. Further, our evidence suggests that the self-selection in the cessation decision, but not in the initiation decision, is consistent with economic rationality. We estimate the model by full information maximum likelihood (FIML) with starting values from heteroskedasticity corrected Heckman-Lee two-step method using newly released Health and Retirement Study (HRS) data. Copyright © 2000 John Wiley & Sons, Ltd.

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Bibliographic Info

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

Volume (Year): 9 (2000)
Issue (Month): 6 ()
Pages: 491-511

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Handle: RePEc:wly:hlthec:v:9:y:2000:i:6:p:491-511

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

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Cited by:
  1. Grignon, Michel, 2009. "An empirical investigation of heterogeneity in time preferences and smoking behaviors," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 739-751, October.
  2. R. Brau & M. Lippi Bruni & AM. Pinna, 2004. "Public vs private demand for covering long term care expenditures," Working Paper CRENoS 200408, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  3. Vadean, Florin & Piracha, Matloob, 2009. "Circular Migration or Permanent Return: What Determines Different Forms of Migration?," IZA Discussion Papers 4287, Institute for the Study of Labor (IZA).
  4. Matloob Piracha & Massimiliano Tani & Florin Vadean, 2011. "Immigrant Over- and Under-education: The Role of Home Country Labour Market Experience," Studies in Economics 1105, Department of Economics, University of Kent.
  5. Mir M. Ali, 2012. "Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 232(6), pages 633-651, November.
  6. Lisa R. Anderson & Jennifer M. Mellor, 2007. "Predicting Health Behaviors with an Experimental Measure of Risk Preference," Working Papers 59, Department of Economics, College of William and Mary.
  7. Lokshin, Mikhail & Sajaia, Zurab, 2007. "The Economic Cost of Smoking: Differences in Wages between Smokers and Non-smokers in Russia," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 6(2), pages 60-80.
  8. Coulson, N. Edward & Li, Herman, 2013. "Measuring the external benefits of homeownership," Journal of Urban Economics, Elsevier, vol. 77(C), pages 57-67.
  9. Lisa Anderson & Jennifer Mellor, 2009. "Are risk preferences stable? Comparing an experimental measure with a validated survey-based measure," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 137-160, October.
  10. Julie Hotchkiss & M. Melinda Pitts, 2005. "Female labour force intermittency and current earnings: switching regression model with unknown sample selection," Applied Economics, Taylor & Francis Journals, vol. 37(5), pages 545-560.
  11. Silvia Balia & Andrew M. Jones, 2007. "Unravelling the influence of smoking initiation and cessation on premature mortality using a common latent factor model," Health, Econometrics and Data Group (HEDG) Working Papers 07/06, HEDG, c/o Department of Economics, University of York.
  12. Julie L. Hotchkiss & M. Melinda Pitts, 2003. "Female labor force intermittency and current earnings: a switching regression model with unknown sample selection," Working Paper 2003-33, Federal Reserve Bank of Atlanta.
  13. Jeffrey E. Harris & Beatriz Lopez-Valcarcel, 2004. "Asymmetric Social Interaction in Economics: Cigarette Smoking Among Young People in the United States, 1992-1999," NBER Working Papers 10409, National Bureau of Economic Research, Inc.
  14. Takeshima, Hiroyuki & Winter-Nelson, Alex, 2010. "Sales location and supply response among semisubsistence farmers in Benin," IFPRI discussion papers 999, International Food Policy Research Institute (IFPRI).

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