Adjustment costs, withdrawal effects, and cigarette addiction

Estimating the Smoking Ban Effects on Smoking Prevalence, Quitting and Cigarette Consumption in a Population Study of Apprentices in Italy

Objectives: We evaluated the effects of the Italian 2005 smoking ban in public places on the prevalence of smoking, quitting and cigarette consumption of young workers. Data and Methods: The dataset was obtained from non-computerized registers of medical examinations for a population of workers with apprenticeship contracts residing in the province of Viterbo, Italy, in the period 1996–2007. To estimate the effects of the ban, a segmented regression approach was used, exploiting the discontinuity introduced by the application of the law on apprentices’ smoking behavior. Results: It is estimated that the Italian smoking ban generally had no effect on smoking prevalence, quitting ratio, or cigarette consumption of apprentices. However, when the estimates were applied to subpopulations, significant effects were found: −1% in smoking prevalence, +2% in quitting, and −3% in smoking intensity of apprentices with at least a diploma.

Breaking bad habits by education - smoking dynamics among Swedish women

In a dynamic Two-Part Model (2 PM), we find the effect of previous smoking on the participation decision to be decreasing with education among Swedish women, i.e. more educated are less state dependent. However, we do not find an analogous effect of education on the conditional intensity of consumption.

Interactions between cigarette and alcohol consumption in rural China

The objective of this paper is to analyze interdependencies between cigarette and alcohol consumption in rural China, using panel data for 10 years (1994-2003) for rural areas of 26 Chinese provinces. There have been many studies in which cigarette and alcohol consumption have been considered separately but few to date for China on interactions between the consumption of these two products. Taxes are often recommended as a tool to reduce alcohol and cigarette consumption. If cigarettes and alcohol are complements, taxing one will reduce the consumption of both and thus achieve a double public health dividend. However, if they are substitutes, taxing one will induce consumers to increase consumption of the other, offsetting the public health benefits of the tax. Our results indicate that the demands for both cigarettes and alcohol are very sensitive to the price of alcohol, but not to the price of cigarettes or to income. This suggests that taxes on alcohol can have a double dividend. On the other hand, an increase in cigarette taxes may not be effective in curbing cigarette or alcohol consumption in rural China.

Cigarette taxes and the transition from youth to adult smoking: smoking initiation, cessation, and participation

Many policy makers continue to advocate and adopt cigarette taxes as a public health measure. Most previous individual-level empirical studies of cigarette demand are essentially static analyses of the relationship between the level of taxes and smoking behavior at a point in time. In this study, we use longitudinal data to examine the dynamics of young adults' decisions about smoking initiation and cessation. We develop a simple model to highlight the distinctions between smoking initiation, cessation, and participation. We show that because smoking participation reflects past decisions regarding initiation and cessation, the price elasticity of smoking participation is a weighted average of corresponding initiation and cessation elasticities, a finding that applies more broadly to other addictive substances as well. The paper's remaining contributions are empirical. We use data from the 1992 wave of the National Education Longitudinal Study, when most of the cohort were high school seniors, and data from the 2000 wave, when they were about 26 years old. The results show that the distinction between initiation and cessation is empirically useful. We also contribute new estimates on the tax-responsiveness of young adult smoking, paying careful attention to the possibility of bias if hard-to-observe differences in anti-smoking sentiment are correlated with state cigarette taxes. We find no evidence that higher taxes prevent smoking initiation, but some evidence that higher taxes are associated with increased cessation.

Smoking, health, risk, and perception

We provide a description of health-related incentives faced by a rational smoker by considering the role of perception in both immediate quality-of-life effects of smoking and future risk of mortality. A person who adapts psychologically to a lowered health state, smokes more early in life and shifts demands for health investments and health-complementary activities later in life. He also smokes more in total. Someone aware of the full mortality consequences of smoking, smokes less and demands less medical care than someone who believes that these effects are highly reversible. The impacts of new information on mortality risk are most valuable early in life. Lastly, someone endowed with a longer life expectancy smokes more in the first part of life but conditional on access to medical care.

Smokers' expectations to quit smoking

We investigate the effectiveness of different smoking policies on smokers' expectations to quit smoking using a choice experiment on a sample of smokers identified within the World Health Organization (WHO) MONICA Project. Our results indicate that restricted availability, increased cigarette prices, cessation subsidies and regulations at restaurants, bars and cafes increase the expected probability of smoking cessation. Regulations at work places do not seem to have any effect. The results also show the significant role of limited self-control; smokers who have the intent to quit smoking are more likely to quit smoking if a stricter regulation is implemented. Further, smokers who have received advice from their children to quit smoking or who perceive the health risks as considerable, are more likely to expect to quit smoking.

Do health changes affect smoking? Evidence from British panel data

This paper uses seven waves of British Household Panel Survey (BHPS) data to examine the link between health developments while smoking (both one's own and those of other smokers in the same household) and future cigarette consumption. We find those whose health worsens when smoking smoke less in the future, and are more likely to quit. This correlation is consistent with both a Grossman model of health demand (where all parameters are known) and with learning about the health consequences of smoking (where there is uncertainty). There is little effect on smoking from health developments amongst other smokers in the same household. As such, impersonal information provision may have less of an effect on smoking than the delivery of personalised health information, for example through the medical profession.

Addiction as a market failure: using rational addiction results to justify tobacco regulation

Tobacco regulation efforts have been criticized by some academic economists for failing to provide adequate welfare-analytic justification. This paper attempts to address these criticisms. Unlike previous research that has discussed second-hand smoke and health care financing externalities, this paper develops the logic for identifying the much larger market failures attributable to the failure of smokers to fully internalize the costs of their addictive behavior. The focus is on teen addiction as a form of "intrapersonal" externality and observed adult consumption behavior consistent with partial myopia. The importance of peer effects, in the consideration of welfare impacts, is also emphasized.