Low Income and Poor Health Choices: The Example of Smoking

James Binkley

American Journal of Agricultural Economics, 2010, vol. 92, issue 4, 972-984

Abstract: Low-income individuals often make relatively unhealthy consumption choices. In the case of food, this is often attributed to limited budgets. We investigate another possibility, motivated by the fact that smoking is more prevalent among those with low incomes, despite the cost. We develop a model in which income serves both as a budget constraint and as a source of future utility. We test the model by estimating logistic models of beginning and quitting smoking. We find support for the idea that low-income consumers make less healthy choices because they face lower costs in terms of forgone future utility. Copyright 2010, Oxford University Press.

Date: 2010
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