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Life Cycle Consumption of a Harmful and Addictive Good

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  • Goldbaum, David

Abstract

This article demonstrates that the endogenous desire to quit smoking can result from a rational consumption path chosen at the time the consumer begins smoking. This result is obtained without relying on hidden costs or unknown preferences. A finite-lived agent chooses a path of consumption of a harmful and addictive good to maximize present discounted utility. The consumer chooses his consumption rate to account for the future health consequence of smoking and the withdrawal costs of quitting. A consumer may choose to smoke even if it means a lowered utility level for the majority of the time spent smoking. Copyright 2000 by Oxford University Press.

Suggested Citation

  • Goldbaum, David, 2000. "Life Cycle Consumption of a Harmful and Addictive Good," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 458-469, July.
    • Handle: RePEc:oup:ecinqu:v:38:y:2000:i:3:p:458-69
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    Citations

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    Cited by:

    1. Nuria Badenes-Plá & Andrew M. Jones, 2003. "Addictive goods and taxes: A survey from an economic perspective," Hacienda Pública Española / Review of Public Economics, IEF, vol. 167(4), pages 123-153, December.
    2. O’Donoghue, Ted & Rabin, Matthew, 2002. "Addiction and Present-Biased Preferences," Department of Economics, Working Paper Series qt3v86x53j, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    3. Sophie Massin, 2011. "La notion d'addiction en économie : La théorie du choix rationnel à l'épreuve," Revue d'économie politique, Dalloz, vol. 121(5), pages 713-750.
    4. Carbone, Jared C. & Kverndokk, Snorre & Rogeberg, Ole Jorgen, 2005. "Smoking, health, risk, and perception," Journal of Health Economics, Elsevier, vol. 24(4), pages 631-653, July.
    5. Marysia Ogrodnik, 2015. "An Economic Model of Stages of Addictive Consumption," Documents de travail du Centre d'Economie de la Sorbonne 15075, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    6. Sophie Massin, 2008. "The notion of addiction in economics and its challenge to the theory of rational choice [La notion d'addiction en économie : la théorie du choix rationnel à l'épreuve]," Post-Print halshs-00331284, HAL.
    7. Ole Rogeberg, 2003. "Preferences, Rationality and Welfare in Becker's Extended Utility Approach," Rationality and Society, , vol. 15(3), pages 283-323, August.
    8. Gabriel Picone & Frank Sloan, 2003. "Smoking Cessation and Lifestyle Changes," NBER Chapters, in: Frontiers in Health Policy Research, Volume 6, pages 115-142, National Bureau of Economic Research, Inc.
    9. Carbone, Jared & Kverndokk, Snorre & Røgeberg, Ole-Jørgen, 2009. "Smoking and Health Investments: Impacts of Health Adaptation and Damage Reversibility," HERO Online Working Paper Series 2003:12, University of Oslo, Health Economics Research Programme.
    10. Marysia Ogrodnik, 2015. "An Economic Model of the Stages of Addictive Consumption," Post-Print halshs-01224553, HAL.
    11. Junmin Wan, 2004. "Consumption of Cigarettes, Nicotine, and Tar under Anti-smoking Policies: Japan as a Case Study," Discussion Papers in Economics and Business 04-12-Rev, Osaka University, Graduate School of Economics, revised Mar 2006.
    12. 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.
    13. Robert Goldfarb & Thomas Leonard & Steven Suranovic, 2001. "Are rival theories of smoking underdetermined?," Journal of Economic Methodology, Taylor & Francis Journals, vol. 8(2), pages 229-251.
    14. Steven M. Suranovic, 2005. "An Economic Model of Youth Smoking: Tax and Welfare Effects," HEW 0511003, University Library of Munich, Germany.
    15. Alamar Benjamin & Glantz Stanton A., 2006. "Modeling Addictive Consumption as an Infectious Disease," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-24, March.

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