Working Paper: NBER ID: w3267
Authors: Frank J. Chaloupka
Abstract: Cigarette demand equations, derived from the Becker-Murphy model of rational addictive behavior, are estimated separately for men and women. These demand equations account for the reinforcement, tolerance, and withdrawal factors characterizing addictive consumption. Results obtained from these demand equations support the hypothesis that cigarette smoking is an addictive behavior. Particularly interesting are the findings that men are responsive to changes in the price of cigarettes, with a long run price elasticity centered on -0.60, while women are virtually unresponsive to price changes. Men, however, are found to behave more myopically than women.
Keywords: Cigarette smoking; Addiction; Gender differences; Health economics
JEL Codes: I12; J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Cigarette prices (P22) | Cigarette consumption (D12) |
| Past consumption (D12) | Current consumption of cigarettes (D12) |
| Cigarette prices (P22) | Men's cigarette consumption (I12) |
| Cigarette prices (P22) | Women's cigarette consumption (J16) |
| Men's smoking habits (I12) | Myopic behavior (D01) |