Using Cigarette Taxes When Smokers Are Heterogeneous: Evidence on Hyperbolic Preferences, Endogenous Preferences, Smoking, and Price Elasticity of Smoking in France

Michel Grignon ()

No 2007-10, Centre for Health Economics and Policy Analysis Working Paper Series from Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada

Abstract: I use a unique dataset to estimate the relationship between time preferences, social capital, and the decision to start and quit smoking. I find impatient respondents do not differ much from patient ones, but quasi-hyperbolic respondents tend to smoke more often and have much more difficulties quitting. I also find that trust in the community protects from starting and helps quitting, but sense of control encourages starting smoking. These preliminary results strongly suggest that smokers form a heterogeneous population: I argue that such heterogeneity means that taxes on cigarettes are a blunt and inefficient instrument of public health.

Pages: 49 pages
Date: 2007
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Citations: View citations in EconPapers (2)

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