NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Rational Addictive Behavior and Cigarette Smoking

Frank J. Chaloupka

NBER Working Paper No. 3268 (Also Reprint No. r1668)
Issued in February 1990
NBER Program(s):   HE

After a discussion of cigarette smoking in the context of the Becker-Murphy (1988) model of rational addictive behavior, demand equations are derived accounting for the tolerance, reinforcement, and withdrawal characteristic of addictive consumption. These are contrasted to equations developed under the competing hypotheses that smoking is not addictive or that cigarettes are addictive but individuals behave myopically. The demand equations are estimated using adults interviewed as part of the Second National Health and Nutrition Examination Survey. Estimates support the assumptions that cigarette smoking is an addictive behavior and that individuals do not behave myopically. Long run price elasticities of demand, fall in the range from -0.38 to -0.27. These estimates suggest that increased excise taxation would be an effective way of reducing cigarette smoking. Estimates for samples of current and ever smokers indicate that price increases would lead to lower cigarette consumption among both groups. Finally, the Becker-Murphy model's implications concerning the rate of tine preference and addictive consumption are tested by estimating the demand for cigarettes separately using samples based on age or education. Less educated and younger individuals are found to behave much more myopically than their more educated or older counterparts. Additionally, more addicted (myopic) individuals are found to be more responsive, in the long run, to changes in price than less addicted (myopic) individuals.

download in pdf format
   (380 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (380 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w3268

Published: Journal of Political Economy, Vol. 99, No. 4, pp. 722-742, (August 1991).

Users who downloaded this paper also downloaded these:
Chaloupka and Warner w7047 The Economics of Smoking
Becker, Grossman, and Murphy w3322 An Empirical Analysis of Cigarette Addiction
Gruber and Koszegi w7507 Is Addiction "Rational"? Theory and Evidence
Chaloupka w3267 Men, Women, and Addiction: The Case of Cigarette Smoking
Chaloupka and Grossman w5740 Price, Tobacco Control Policies and Youth Smoking
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us