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The Behavioral Dynamics of Youth Smoking

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  • Donna B. Gilleskie
  • Koleman S. Strumpf

Abstract

While individual smoking behavior persists over time, it is unknown whether this repeated behavior is due to addiction or individual propensities to smoke. To address this issue, we develop a dynamic empirical model of smoking decisions which explicitly accounts for the impact of previous smoking behavior and allows for unobserved individual heterogeneity. The model is estimated using longitudinal data on a representative sample of teens from all 50 United States from 1988 to 1992. We find that current smokers are both more likely to continue smoking and are less price sensitive than current non-smokers. For example, smoking in 8th grade (as opposed to not smoking) increased the probability of smoking two years later three fold, while smoking participation rates are double four years later. The estimated price sensitivities of previous non-smokers and previous smokers are -0.32 and 0.08, respectively. This suggests that a cigarette price increase will have a larger aggregate effect in the long run than in the short run as more individuals accumulate in the price-sensitive non-smoking group. In total, a dollar increase in cigarette prices reduces (age 18) smoking participation predictions by four percentage points more when unobserved individual heterogeneity and behavior modification associated with previous price changes are taken into account than when they are ignored.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7838.

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Date of creation: Aug 2000
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Publication status: published as Gilleskie, Donna B. and Koleman S. Strumpf. "The Behavioral Dynamics Of Youth Smoking," Journal of Human Resources, 2005, v40(4,Fall), 822-866.
Handle: RePEc:nbr:nberwo:7838

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  1. Hsiao,Cheng, 2003. "Analysis of Panel Data," Cambridge Books, Cambridge University Press, number 9780521522717, April.
  2. Douglas, Stratford, 1998. "The Duration of the Smoking Habit," Economic Inquiry, Western Economic Association International, vol. 36(1), pages 49-64, January.
  3. Jonathan Gruber, 2000. "Youth Smoking in the U.S.: Prices and Policies," NBER Working Papers 7506, National Bureau of Economic Research, Inc.
  4. Jonathan Gruber & Botond Koszegi, 2000. "Is Addiction "Rational"? Theory and Evidence," NBER Working Papers 7507, National Bureau of Economic Research, Inc.
  5. Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1990. "An Empirical Analysis of Cigarette Addiction," NBER Working Papers 3322, National Bureau of Economic Research, Inc.
  6. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  7. John A. Tauras & Frank J. Chaloupka, 1999. "Determinants of Smoking Cessation: An Analysis of Young Adult Men and Women," NBER Working Papers 7262, National Bureau of Economic Research, Inc.
  8. Frank J. Chaloupka & Kenneth E. Warner, 1999. "The Economics of Smoking," NBER Working Papers 7047, National Bureau of Economic Research, Inc.
  9. Frank J. Chaloupka, 1990. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc.
  10. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc.
  11. Mroz, Thomas A., 1999. "Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome," Journal of Econometrics, Elsevier, vol. 92(2), pages 233-274, October.
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