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The Interaction between Alcohol and Cigarette Consumption

Author

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  • Koksal, Aycan
  • Wohlgenant, Michael K.

Abstract

It has long been recognized that cigarette and alcohol not only have adverse health effects, but also negative externalities imposed on third parties. If cigarette and alcohol are related in consumption, the information on the way in which they are related may allow a better coordination of the public policies concerning these goods. In this study, we use the expenditure data of a panel of US households to analyze the relation between cigarette and alcohol consumption in a rational addiction framework. We believe that individual level data would be a better tool to analyze addictive behavior as aggregate data might conceal much of micro behavior. We found that cigarettes and alcoholic beverages are substitutes. However, both cigarette and alcohol demand do not fit the rational addiction model so well.

Suggested Citation

  • Koksal, Aycan & Wohlgenant, Michael K., 2010. "The Interaction between Alcohol and Cigarette Consumption," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61305, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61305
    DOI: 10.22004/ag.econ.61305
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    Keywords

    Demand and Price Analysis;

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