Working Paper: NBER ID: w24620
Authors: Robert Kaestner; Kevin Callison
Abstract: In this article we develop a model of the demand for cigarettes that incorporates forward-looking behavior related to the adverse health consequences of smoking and the addictive nature of cigarettes. The model results in several testable hypotheses that we use to examine the extent to which smokers exhibit forward-looking behavior. Results of our study are generally supportive of the notion that smokers behave in a forward-looking manner.
Keywords: cigarette demand; forward-looking behavior; tax increases; addiction; health consequences
JEL Codes: D12; I12; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cigarette tax increases (H29) | smoking participation (I12) |
| cigarette tax increases (H29) | addiction levels (I12) |
| income (E25) | price elasticity of demand (D12) |
| self-rated health (I14) | smoking participation (I12) |