Smoking and health investments: Impacts of health adaptation and damage reversibility

2003/12: Carbone, J., Kverndokk, S. & O.J. Røgeberg, University of Colerado og Frischsenteret
(PDF 470 kb)

Fulltext 470 kb

In the present paper we examine how different sets of beliefs about the health effects of smoking would influence a rational smoker. By embedding the rational addiction theory in a Grossman model of health investment modified to take account of psychological adaptation effects, we present a model of a rational addict that allows us to explicitly specify beliefs about a direct and indirect effect on both death risk and utility. This allows us to study how a rational addict would smoke with different beliefs of cancer risks, and with or without the well-documented ability to adapt to health changes. Numerical simulation results illustrate a number of different incentives that influence the smoking paths and health investments under the various beliefs, and suggests that beliefs have different impacts at different ages, providing a richer set of dynamics than might initially be expected.

ISBN 82-7756-116-4
Publisert 25. mai 2011 16:23 - Sist endret 27. sep. 2011 15:53