Smoking, Drinking, and Income

In an effort to increase understanding of the "alcohol/income puzzle"—the finding that drinking appears to lead to higher income—this paper presents maximum simulated likelihood estimates of a system of limited dependent variables governing smoking and drinking patterns and income. With al...

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Bibliographic Details
Published in:The Journal of human resources 2005-04, Vol.XL (2), p.505-518
Main Author: Auld, M. Christopher
Format: Article
Language:English
Subjects:
Alcohol Abuse
Alcohol drinking
Alcohol use
Alcoholism
Cigarette smoking
Correlation analysis
Drinking
Educational administration
Exercise
Health Behavior
Health status
Human resources
Income
Income estimates
Life styles
Maximum likelihood estimation
Smoking
Studies
Substance abuse
Tobacco smoking
Trend Analysis
Wage differentials
Wages & salaries
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Summary:In an effort to increase understanding of the "alcohol/income puzzle"—the finding that drinking appears to lead to higher income—this paper presents maximum simulated likelihood estimates of a system of limited dependent variables governing smoking and drinking patterns and income. With all else held constant, moderate drinking is associated with 10 percent higher income, and heavy drinking associated with 12 percent higher income, than drinking abstention. Smoking is associated with larger effects on income than drinking: Single-equation estimates suggest smokers earn 8 percent less than nonsmokers, and the smoking penalty rises to 24 percent after correcting for endogeneity.
ISSN:0022-166X
1548-8004
DOI:10.3368/jhr.XL.2.505