Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92611
Authors: 
Nakajima, Ryo
Year of Publication: 
2004
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 600
The ISER-Moriguchi Prize Awarded Paper 6
Abstract: 
This paper examines the role of peer effects in smoking behavior using data of middle and high school students in the United States. I present a random utility model that explicitly incorporates complementarity between individual and peer smokings. A Markov process model of smoking interactions between individuals is presented, under the assumption that such interactions occur frequently. I estimate the structural parameters of the model using a steady state distribution that is uniquely determined by the Markov process. The empirical results strongly support the presence of positive peer effects in smoking behavior among young people. Interestingly, peer interactions are found to be stronger within the same gender than across genders. The same result is found for race. Moreover, a multiplier effect is found. The impact of a tax on youth smoking increases by a factor of 1.5 when peer interactions are present.
JEL: 
C15
C35
C63
I12
Document Type: 
Working Paper

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