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Using Cigarette Taxes When Smokers Are Heterogeneous: Evidence on Hyperbolic Preferences, Endogenous Preferences, Smoking, and Price Elasticity of Smoking in France

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Author Info

  • Michel Grignon

    ()
    (Department of Economics and Department of Health, Aging, & Society, McMaster University)

Abstract

I use a unique dataset to estimate the relationship between time preferences, social capital, and the decision to start and quit smoking. I find impatient respondents do not differ much from patient ones, but quasi-hyperbolic respondents tend to smoke more often and have much more difficulties quitting. I also find that trust in the community protects from starting and helps quitting, but sense of control encourages starting smoking. These preliminary results strongly suggest that smokers form a heterogeneous population: I argue that such heterogeneity means that taxes on cigarettes are a blunt and inefficient instrument of public health.

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File URL: http://www.chepa.org/Files/Working%20Papers/CHEPA%20WP%2007-10.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada in its series Centre for Health Economics and Policy Analysis Working Paper Series with number 2007-10.

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Length: 49 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:hpa:wpaper:200710

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Cited by:
  1. PESTIEAU, Pierre & PONTHIERE, Grégory, . "Myopia, regrets, and risky behaviors," CORE Discussion Papers RP -2452, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Pierre Pestieau & Grégory Ponthière, 2009. "Myopia, regrets and risky behaviors," Working Papers halshs-00566823, HAL.

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