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Life Cycle Consumption of a Harmful and Addictive Good

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  • Goldbaum, David

Abstract

This article demonstrates that the endogenous desire to quit smoking can result from a rational consumption path chosen at the time the consumer begins smoking. This result is obtained without relying on hidden costs or unknown preferences. A finite-lived agent chooses a path of consumption of a harmful and addictive good to maximize present discounted utility. The consumer chooses his consumption rate to account for the future health consequence of smoking and the withdrawal costs of quitting. A consumer may choose to smoke even if it means a lowered utility level for the majority of the time spent smoking. Copyright 2000 by Oxford University Press.

Suggested Citation

  • Goldbaum, David, 2000. "Life Cycle Consumption of a Harmful and Addictive Good," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 458-469, July.
    • Handle: RePEc:oup:ecinqu:v:38:y:2000:i:3:p:458-69
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    Citations

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    Cited by:

    1. Nuria Badenes-Plá & Andrew M. Jones, 2003. "Addictive goods and taxes: A survey from an economic perspective," Hacienda Pública Española / Review of Public Economics, IEF, vol. 167(4), pages 123-153, December.
    2. O’Donoghue, Ted & Rabin, Matthew, 2002. "Addiction and Present-Biased Preferences," Department of Economics, Working Paper Series qt3v86x53j, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    3. Sophie Massin, 2011. "La notion d'addiction en économie : La théorie du choix rationnel à l'épreuve," Revue d'économie politique, Dalloz, vol. 121(5), pages 713-750.
    4. Carbone, Jared C. & Kverndokk, Snorre & Rogeberg, Ole Jorgen, 2005. "Smoking, health, risk, and perception," Journal of Health Economics, Elsevier, vol. 24(4), pages 631-653, July.
    5. Marysia Ogrodnik, 2015. "An Economic Model of Stages of Addictive Consumption," Documents de travail du Centre d'Economie de la Sorbonne 15075, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    6. Sophie Massin, 2008. "The notion of addiction in economics and its challenge to the theory of rational choice [La notion d'addiction en économie : la théorie du choix rationnel à l'épreuve]," Post-Print halshs-00331284, HAL.
    7. Ole Rogeberg, 2003. "Preferences, Rationality and Welfare in Becker's Extended Utility Approach," Rationality and Society, , vol. 15(3), pages 283-323, August.
    8. Gabriel Picone & Frank Sloan, 2003. "Smoking Cessation and Lifestyle Changes," NBER Chapters, in: Frontiers in Health Policy Research, Volume 6, pages 115-142, National Bureau of Economic Research, Inc.
    9. Carbone, Jared & Kverndokk, Snorre & Røgeberg, Ole-Jørgen, 2009. "Smoking and Health Investments: Impacts of Health Adaptation and Damage Reversibility," HERO Online Working Paper Series 2003:12, University of Oslo, Health Economics Research Programme.
    10. Marysia Ogrodnik, 2015. "An Economic Model of the Stages of Addictive Consumption," Post-Print halshs-01224553, HAL.
    11. Junmin Wan, 2004. "Consumption of Cigarettes, Nicotine, and Tar under Anti-smoking Policies: Japan as a Case Study," Discussion Papers in Economics and Business 04-12-Rev, Osaka University, Graduate School of Economics, revised Mar 2006.
    12. Mark N. Harris & Ranjodh B. Singh & Preety Srivastava, 2024. "Cannabis and tobacco: substitutes and complements," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(4), pages 1-29, December.
    13. Grignon, Michel, 2009. "An empirical investigation of heterogeneity in time preferences and smoking behaviors," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 739-751, October.
    14. Robert Goldfarb & Thomas Leonard & Steven Suranovic, 2001. "Are rival theories of smoking underdetermined?," Journal of Economic Methodology, Taylor & Francis Journals, vol. 8(2), pages 229-251.
    15. Steven M. Suranovic, 2005. "An Economic Model of Youth Smoking: Tax and Welfare Effects," HEW 0511003, University Library of Munich, Germany.
    16. Alamar Benjamin & Glantz Stanton A., 2006. "Modeling Addictive Consumption as an Infectious Disease," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-24, March.

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