Health Human Capital and the Cost of Smoking

60 Pages Posted: 14 Aug 2003

Date Written: August 2003


This paper exploits variation in health outcomes among middle-age men and women to better understand the "production function" by which cigarette smoking transmits harm. In short, the harm done depends on who does the smoking. Outcome is not randomly determined, but rather varies predictably according to height, own and family education, body weight, and gender, among other things. The results point to the underlying importance of starting stock of good health, its maintenance (for example, through diet), and its depreciation (for example, through smoking). Selection effects are apparent. Smoking is taken up disproportionately by those most likely to incur the greatest harm. And there is a "smoker type" effect, particularly evident in males, who die in alarming numbers compared to smoking females. If cost of hazardous consumption depends importantly on the user's health human capital, then models of optimum exposure, and the public health guidelines they spawn, need to be reconsidered.

Keywords: consumer economics, consumer protection, health & nutrition, mortality, morbidity, substance abuse and addiction, human capital, occupational choice, labor productivity, on-the-job training, environmental law, health and safety law

JEL Classification: D12, D18, I12, J24, K32

Suggested Citation

Ippolito, Richard, Health Human Capital and the Cost of Smoking (August 2003). George Mason Law & Economics Research Paper No. 03-37, Available at SSRN: or

Richard Ippolito (Contact Author)

affiliation not provided to SSRN

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