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Health Changes and Smoking: An Economic Analysis

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Author Info
Andrew Clark
Fabrice Etilé

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Abstract

This paper considers dynamic models of smoking under uncertainty, wherein individuals learn about the associated risks both through experimentation and observation. We use smokers' changes in self-reported health in long-run household panel data as an individualized measure of information about how dangerous smoking is for them. We find that own past health changes while smoking are often positively correlated with current cigarette consumption, implying learning. Other household members' health changes have only a weak effect. We emphasize individual heterogeneity, using both fixed effects in the analysis of cigarette consumption, and age and sex differences in how individuals react to health changes. We conclude that smokers do indeed react to personalized health information (but not necessarily from generalized information), and modify their behavior accordingly. The way in which they react differs sharply by sex and by age, suggesting that aggregate correlations may be misleading.

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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2003-13.

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Date of creation: 2003
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Handle: RePEc:del:abcdef:2003-13

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  1. Forster, Martin, 2001. "The meaning of death: some simulations of a model of healthy and unhealthy consumption," Journal of Health Economics, Elsevier, vol. 20(4), pages 613-638, July. [Downloadable!] (restricted)
  2. Jones, Andrew M., 1994. "Health, addiction, social interaction and the decision to quit smoking," Journal of Health Economics, Elsevier, vol. 13(1), pages 93-110, March. [Downloadable!] (restricted)
  3. Clark, Andrew & Etile, Fabrice, 2002. "Do health changes affect smoking? Evidence from British panel data," Journal of Health Economics, Elsevier, vol. 21(4), pages 533-562, July. [Downloadable!] (restricted)
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  4. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April. [Downloadable!]
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  5. Frank J. Chaloupka & Kenneth E. Warner, 1999. "The Economics of Smoking," NBER Working Papers 7047, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    • Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627 Elsevier. [Downloadable!] (restricted)
  6. Blaylock, J R & Blisard, W N, 1992. "Self-Evaluated Health Status and Smoking Behaviour," Applied Economics, Taylor and Francis Journals, vol. 24(4), pages 429-35, April.
  7. Ada Ferrer-i-Carbonell & Bernard M.S. van Praag, 2002. "The Subjective Costs of Health Losses due to Chronic Diseases," Tinbergen Institute Discussion Papers 02-023/3, Tinbergen Institute. [Downloadable!]
  8. Kenkel, Donald S, 1991. "Health Behavior, Health Knowledge, and Schooling," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 287-305, April. [Downloadable!] (restricted)
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  9. Shmueli, Amir, 1996. "Smoking cessation and health: A comment," Journal of Health Economics, Elsevier, vol. 15(6), pages 751-754, December. [Downloadable!] (restricted)
  10. Jack Hirshleifer & John G. Riley, 1979. "The Analytics of Uncertainty and Information- An Expository Survey," UCLA Economics Working Papers 159, UCLA Department of Economics. [Downloadable!]
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  11. V. Kerry Smith & Donald H. Taylor & Frank A. Sloan & F. Reed Johnson & William H. Desvousges, 2001. "Do Smokers Respond To Health Shocks?," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 675-687, November. [Downloadable!] (restricted)
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  12. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August. [Downloadable!] (restricted)
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  13. Ada Ferrer-i-Carbonell & Bernard M.S. van Praag, 2002. "The subjective costs of health losses due to chronic diseases. An alternative model for monetary appraisal," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 709-722. [Downloadable!]
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