Smoking Persistence Across Countries: An Analysis Using Semi-Parametric Dynamic Panel Data Models with Selectivity

47 Pages Posted: 11 Aug 2009

See all articles by Dimitris Christelis

Dimitris Christelis

Adam Smith Business School, University of Glasgow; Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II; Center for Financial Studies (CFS); Netspar

Anna Sanz-de-Galdeano

Universitat Autònoma de Barcelona; IZA Institute of Labor Economics

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Abstract

We study smoking persistence in ten countries using data from the European Community Household Panel. Such persistence may be due to true state dependence but may also reflect individual unobserved heterogeneity. We distinguish between the two by using semi-parametric dynamic panel data methods applied to both the decision to smoke or not and to the decision on the number of cigarettes smoked. Our model allows for correlation of the two time-varying error terms, i.e. for selectivity. We find that for both smoking decisions true state dependence is in general much smaller when unobserved individual heterogeneity is taken into account, and we also uncover large differences in true state dependence across countries. Finally, we find that taking into account heaping in the reported number of cigarettes smoked considerably improves the fit of our model.

Keywords: smoking, panel data, selectivity

JEL Classification: C33, C34, D12, I10, I12

Suggested Citation

Christelis, Dimitrios and Sanz De Galdeano, Anna, Smoking Persistence Across Countries: An Analysis Using Semi-Parametric Dynamic Panel Data Models with Selectivity. IZA Discussion Paper No. 4336, Available at SSRN: https://ssrn.com/abstract=1446188

Dimitrios Christelis (Contact Author)

Adam Smith Business School, University of Glasgow ( email )

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Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II ( email )

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Center for Financial Studies (CFS) ( email )

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Anna Sanz De Galdeano

Universitat Autònoma de Barcelona ( email )

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Spain

IZA Institute of Labor Economics

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Bonn, D-53072
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