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Smoking Behavior and Rank-Dependent Expected-Uitility

  • Christophe Courbage
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    In this note we use the Rank-Dependent Expected-Utility (RDEU) model to analyse how the effect of improved information on smoking risks impacts the consumption of cigarettes. The RDEU model enables us to incorporate the ways individuals perceive smoking risks. We provide conditions for individuals to modify cigarette consumption in the face of improved information, and we show that these conditions depend in particular on the probability of being ill.

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    File URL: http://www.sjes.ch/papers/2006-II-2.pdf
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    Article provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.

    Volume (Year): 142 (2006)
    Issue (Month): II (June)
    Pages: 223-230

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    Handle: RePEc:ses:arsjes:2006-ii-2
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    1. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
    2. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
    3. Hsieh, Chee-Ruey & Yen, Lee-Lan & Liu, Jin-Tan & Chyongchiou Jeng Lin, 1996. "Smoking, health knowledge, and anti-smoking campaigns: An empirical study in Taiwan," Journal of Health Economics, Elsevier, vol. 15(1), pages 87-104, February.
    4. Viscusi, W Kip, et al, 2000. " Smoking Risks in Spain: Part III--Determinants of Smoking Behavior," Journal of Risk and Uncertainty, Springer, vol. 21(2-3), pages 213-34, November.
    5. Chateauneuf, Alain & Cohen, Michele, 1994. "Risk Seeking with Diminishing Marginal Utility in a Non-expected Utility Model," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 77-91, July.
    6. Zweifel, Peter, 2001. " Improved Risk Information, the Demand for Cigarettes, and Anti-tobacco Policy," Journal of Risk and Uncertainty, Springer, vol. 23(3), pages 299-303, November.
    7. Evans, William N & Viscusi, W Kip, 1991. "Estimation of State-Dependent Utility Functions Using Survey Data," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 94-104, February.
    8. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
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