Smoking and the Business Cycle: Evidence from Germany

Micha Kaiser (), Mirjam Reutter (), Alfonso Sousa-Poza and Kristina Strohmaier ()
Additional contact information
Micha Kaiser: Copenhagen Business School
Mirjam Reutter: European University Institute
Kristina Strohmaier: University of Tuebingen

No 10953, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper, we use data from the German Socio-Economic Panel to investigate the effect on cigarette consumption of macro-economic conditions in the form of regional unemployment rates. The results from our panel data models, several of which control for selection bias, indicate that the propensity to become a smoker increases significantly during an economic downturn, with an approximately 0.7 percentage point increase for each one percentage point rise in the unemployment rate. Conversely, conditional on the individual being a smoker, cigarette consumption decreases during recessions, with a one percentage point increase in the regional unemployment rate leading to an up to 0.8 percent decrease in consumption.

Keywords: unemployment; smoking; business cycle (search for similar items in EconPapers)
JEL-codes: E32 I12 J22 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2017-08
New Economics Papers: this item is included in nep-eur, nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published as 'Smoking and local unemployment: Evidence from Germany ' in: Economics & Human Biology, 2018, 29, 138 - 147

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