Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/36062 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 4336
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We study smoking persistence in ten countries using data from the European Community Household Panel. Such persistence may be due to true state dependence but may also reflect individual unobserved heterogeneity. We distinguish between the two by using semi-parametric dynamic panel data methods applied to both the decision to smoke or not and to the decision on the number of cigarettes smoked. Our model allows for correlation of the two time-varying error terms, i.e. for selectivity. We find that for both smoking decisions true state dependence is in general much smaller when unobserved individual heterogeneity is taken into account, and we also uncover large differences in true state dependence across countries. Finally, we find that taking into account heaping in the reported number of cigarettes smoked considerably improves the fit of our model.
Subjects: 
Smoking
panel data
selectivity
JEL: 
C33
C34
D12
I10
I12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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