EconStor >
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Essen >
Ruhr Economic Papers, RWI >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/26799
  
Title:Tobacco and alcohol: complements or substitutes?: a structural model approach PDF Logo
Authors:Tauchmann, Harald
Göhlmann, Silja
Requate, Till
Schmidt, Christoph M.
Issue Date:2007
Series/Report no.:Ruhr economic papers 34
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-smoking 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 moderate reduction in alcohol consumption. It is shown theoretically that this implies that alcohol and tobacco are complements. Hence, we conclude that successful anti-smoking policies will not result in the unintended side-effect of an increased (ab)use of alcohol.
Subjects:Complements or substitutes
interdependence in consumption
tobacco and alcohol
insufficient price-variation
instrumental variables approach
JEL:C31
D12
I12
ISBN:978-3-86788-031-2
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des RWI
Ruhr Economic Papers, RWI

Files in This Item:
File Description SizeFormat
556627970.PDF256.19 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/26799

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.