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Tobacco and alcohol: complements or substitutes? A statistical Guinea Pig approach

Author

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  • Requate, Till
  • Göhlmann, Silja
  • Tauchmann, Harald
  • Schmidt, Christoph M.

Abstract

The question of whether two drugs - namely alcohol and tobacco - are used as complements or substitutes is of crucial interest if side-effects of anti-drug policies are considered. Numerous papers have empirically addressed this issue by estimating demand systems for alcohol and tobacco and subsequently calculating cross-price effects. However, this traditional approach often is seriously hampered by insufficient price-variation observed in survey data. We, therefore, suggest an alternative instrumental variables approach that statistically mimics an experimental study and does not rely on prices as explanatory variables. This approach is applied to German survey data. Our estimation results suggest that a reduction in tobacco consumption results in a reduction in alcohol consumption, too. It is shown theoretically that this implies that alcohol and tobacco are complements. Hence, we conclude that successful antismoking policies will not result in the unintended side-effect of an increased (ab)use of alcohol.

Suggested Citation

  • Requate, Till & Göhlmann, Silja & Tauchmann, Harald & Schmidt, Christoph M., 2006. "Tobacco and alcohol: complements or substitutes? A statistical Guinea Pig approach," Economics Working Papers 2006-18, Christian-Albrechts-University of Kiel, Department of Economics.
    • Handle: RePEc:zbw:cauewp:5165
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    References listed on IDEAS

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    Cited by:

    1. Jaya Jumrani & P. S. Birthal, 2017. "Does consumption of tobacco and alcohol affect household food security? Evidence from rural India," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(2), pages 255-279, April.
    2. Pierpaolo Pierani & Silvia Tiezzi, 2009. "Addiction and interaction between alcohol and tobacco consumption," Empirical Economics, Springer, vol. 37(1), pages 1-23, September.
    3. Göhlmann, Silja & Schmidt, Christoph M., 2008. "Smoking in Germany: Stylized Facts, Behavioral Models, and Health Policy," Ruhr Economic Papers 64, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. repec:zbw:rwirep:0186 is not listed on IDEAS
    5. Schmidt, Christoph M. & Tauchmann, Harald, 2011. "Heterogeneity in the intergenerational transmission of alcohol consumption: A quantile regression approach," Journal of Health Economics, Elsevier, vol. 30(1), pages 33-42, January.
    6. repec:zbw:rwirep:0064 is not listed on IDEAS
    7. Silja Göhlmann & Christoph M. Schmidt, 2008. "Smoking in Germany: Stylized Facts, Behavioral Models, and Health Policy," Ruhr Economic Papers 0064, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Christoph M. Schmidt & Harald Tauchmann, 2010. "Heterogeneity in the Intergenerational Transmission of Alcohol Consumption – A Quantile Regression Approach," Ruhr Economic Papers 0186, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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    More about this item

    Keywords

    interdependence in consumption; tobacco and alcohol; instrumental variables approach;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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