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The Welfare Costs of Addiction

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  • Hendrik Jürges

Abstract

This paper presents an attempt to calculate the non-financial costs of tobacco addiction. Using data on individual well-being and smoking behaviour, it is shown that tobacco addicts are on average less happy than non-addicts even if the potential endogeneity of smoking is controlled for. This lends support to the notion of "unhappy addicts". It is estimated how much money income individual smokers must be given in order to be compensated for their reduction in well-being. Projections based on these figures suggest that the aggregate non-financial welfare costs of smoking might easily be higher than the aggregate financial costs.

Suggested Citation

  • Hendrik Jürges, 2004. "The Welfare Costs of Addiction," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 124(3), pages 327-353.
  • Handle: RePEc:aeq:aeqsjb:v124_y2004_i3_q3_p327-353
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    References listed on IDEAS

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    Cited by:

    1. Abel Brodeur, 2012. "Smoking, Income and Subjective Well-Being: Evidence from Smoking Bans," PSE Working Papers halshs-00664269, HAL.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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