publication . Article . Preprint . 2001

rationally addicted to drinking and smoking

Bask, Mikael; Melkersson, Maria;
Open Access
  • Published: 01 Nov 2001 Journal: Applied Economics, volume 36, pages 373-381 (issn: 0003-6846, eissn: 1466-4283, Copyright policy)
  • Publisher: Informa UK Limited
Abstract
When modelling demand for addictive consumption goods, the most widely used framework is the rational addiction model proposed by Becker and Murphy. This paper extends the rational addiction model to include two addictive consumption goods, alcohol and cigarettes, and using aggregate annual time series on sales volumes for the period 1955-1999, estimates the aggregate demand for these goods in Sweden, where OLS estimates are compared to GMM estimates allowing for possible endogeneity of lagged and lead consumption. First, the demand for alcohol and cigarettes are estimated as separate equations and it is found that alcohol demand is quite well described by the r...
Subjects
free text keywords: Alcohol Demand; Cigarette Demand; Habitual Consumption; Rational Addiction, Microeconomics, Economics, Aggregate demand, Consumption (economics), Endogeneity, Macroeconomics, Addiction, media_common.quotation_subject, media_common, Rational addiction, jel:D11, jel:D12
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publication . Article . Preprint . 2001

rationally addicted to drinking and smoking

Bask, Mikael; Melkersson, Maria;