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Health Changes and Smoking: An Economic Analysis

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  • Andrew Clark
  • Fabrice Etilé

Abstract

This paper considers dynamic models of smoking under uncertainty, wherein individuals learn about the associated risks both through experimentation and observation. We use smokers' changes in self-reported health in long-run household panel data as an individualized measure of information about how dangerous smoking is for them. We find that own past health changes while smoking are often positively correlated with current cigarette consumption, implying learning. Other household members' health changes have only a weak effect. We emphasize individual heterogeneity, using both fixed effects in the analysis of cigarette consumption, and age and sex differences in how individuals react to health changes. We conclude that smokers do indeed react to personalized health information (but not necessarily from generalized information), and modify their behavior accordingly. The way in which they react differs sharply by sex and by age, suggesting that aggregate correlations may be misleading.

Suggested Citation

  • Andrew Clark & Fabrice Etilé, 2003. "Health Changes and Smoking: An Economic Analysis," DELTA Working Papers 2003-13, DELTA (Ecole normale supérieure).
  • Handle: RePEc:del:abcdef:2003-13
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    Cited by:

    1. Federico A.Todeschini & José María Labeaga & Sergi Jiménez Martín, 2010. "Killing by lung cancer or by diabetes? The trade-off between smoking and obesity," Working Papers 2010-16, FEDEA.
    2. Chen, Yu-Fu & Petrie, Dennis, 2012. "When to Quit Under Uncertainty? A real options approach to smoking cessation," SIRE Discussion Papers 2012-79, Scottish Institute for Research in Economics (SIRE).

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