RT Journal Article
SR Electronic
T1 Is Smoking Inferior?
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 1094
OP 1120
DO 10.3368/jhr.49.4.1094
VO 49
IS 4
A1 Kenkel, Donald S.
A1 Schmeiser, Maximilian D.
A1 Urban, Carly
YR 2014
UL http://jhr.uwpress.org/content/49/4/1094.abstract
AB In this paper we estimate the causal income elasticity of smoking participation, cessation, and cigarette demand conditional upon participation. Using an instrumental variables (IV) estimation strategy, we find that smoking appears to be a normal good among low-income adults: Higher-instrumented income is associated with an increase in the number of cigarettes consumed and a decrease in smoking cessation. The magnitude and direction of the changes in the income coefficients from our OLS to IV estimates are consistent with the hypothesis that correlational estimates between income and smoking-related outcomes are biased by unobservable characteristics that differentiate higher-income smokers from lower-income smokers.