Economic Stress and Cigarette Smoking: Evidence from the United States
Posted: 26 Mar 2016 Last revised: 19 Apr 2016
Date Written: 2014
This paper uses pooled data on U.S. states for the post-MSA period to estimate the demand for cigarettes, with the main contribution lying in considering the effects of economic stress/uncertainty. Different measures of economic stress – standard deviations and averages of unemployment and property prices – are considered. Greater economic stress is found to lower cigarette smoking across various specifications. Other findings largely support the literature on cigarette demand – price effects are negative, border price effects are positive and the effect of income is negative.
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