The association between time preference and smoking behavior: A dynamic panel analysis

Takahiro Miura ()
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Takahiro Miura: Graduate School of Economics, Osaka University

No 16-16, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper analyzes the association between time preference and smoking behavior while controlling the effect of past smoking behavior using a dynamic panel analysis, and I compare the results in a static model. I use nationwide micro panel data from Japan; the data include time preference, demographic variables, and smoking status. The results of the estimation are as follows: (i) As in the previous literature, without controlling for the effect of past smoking behavior, I find a statistically significant association between time preference and smoking behavior. (ii) Using a dynamic panel analysis, I find no association between time preference and smoking behavior; however, the result changes when I use another definition for a current smoker. Additionally, I find an effect of past smoking behavior on current smoking behavior. (iii) The association between time preference and smoking behavior significantly decreases when the effect of past smoking behavior is controlled. The result is robust for a change in the definition of current smoker, addressing the difference of unobserved individual heterogeneity between those who never smoked and former smokers, the different effect of persistence according to the level of cigarette consumption, the sample selection problem, and the use of a quasi-hyperbolic model.

Keywords: time preference; smoking; dynamic panel; state dependence (search for similar items in EconPapers)
JEL-codes: I12 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016-05
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