Addiction, Social Interactions and Gender Differences in Cigarette Consumption

This paper addresses the impact of addiction and social interactions on cigarette demand, controlling for demographic and socioeconomic factors. A Box-Cox double-hurdle model for the simultaneous decisions of how much to smoke and whether to quit smoking is estimated on individual data from the 2000 Italian “Health Status and Use of Health Services” survey. The model incorporates the fixed costs of quitting and allows for the analysis of the effects of addiction and within-household interactions on smoking participation and cigarette consumption. Estimation results show that the duration of the smoking habit, used as measure of addiction, significantly increases the level of cigarette consumption and lowers the probability of quitting. Within-household social interactions affect individual’s attitude toward smoking. Participation decision is significantly influenced by the presence of other smokers and individual cigarette consumption increases as the consumption of the peer-group grows. Finally, gender differences are formally tested to verify whether male and female sub-samples can be pooled or should be separately analyzed. The hypothesis of equal consumption parameters is clearly rejected, suggesting the opportunity of distinguishing the consumption patterns of men and women.cigarette consumption, social interactions, gender effects, double-hurdle models.

A Double-Hurdle Approach to Modelling Tobacco Consumption in Italy

This paper analyses the determinants of tobacco expenditures for a sample of Italian households. A Box- Cox double-hurdle model adjusted for heteroscedasticity is estimated to account for separate individual decisions concerning smoking participation and tobacco consumption and to correct for non-normality in the bivariate distribution of the error terms. Nested univariate and bivariate models are found to be excessively restrictive, supporting the adequacy of a generalized specification. Estimation results show that consumption decisions are significantly affected by income and demographic characteristics. In particular, income positively impacts tobacco expenditure, while participation probability substantially declines as age increases. The existence of significant gender differences in both smoking participation and tobacco consumption patterns is found, while high education and white collar occupation reduce the likelihood to smoke and tobacco expenditure levels. Single adult households have a lower probability of smoking initiation even if, conditional on smoking, they consume more. Finally, complementarity between tobacco and alcohol beverages suggests the necessity of joint public health strategies.tobacco consumption, double-hurdle models, limited dependent variables, Box-Cox transformation

Speed and Sequencing of Transition Reforms and Income Inequality: a Panel Data Analysis

An extensive literature has analysed the economic effects of transition patterns in Central and Eastern European and former Soviet Union countries. With few recent exceptions, analysis of the impacts of speed and sequencing of reforms has not concerned the dynamics of income inequality. In this paper we analyse the heterogeneous effects of transition reforms on inequality by explicitly considering their speed and sequencing. To this aim we identify seven transition models in which the 27 countries considered can be classified. The dynamic panel econometric analysis for the period 1989–2006 reveals that balanced transition patterns, which favoured a coordination of reforms especially in specific fields, were relatively less pro-inequality.Inequality, Transition, Reform speed and sequencing, Dynamic panel models

Regional Differences in Growth Rates: A Microdata Approach

The aim of the present study is to analyse the dynamics of regional consumption and income to explain two significant empirical evidences that have characterized Italian economy in the last two decades: (i) the fall in private saving rate; (ii) the persistence of a wide gap between consumption and income levels of Central-Northern and Southern areas of Italy. The theoretical framework adopted to investigate the effects of economic growth on saving is based on the life cycle hypothesis (LCH) (Modigliani and Brumberg, 1954). As highlighted by recent empirical works, the effect of economic growth on individual saving rates strictly depends on how labour income is affected by growth (Deaton and Paxson, 2000). In this study, we provide a measure of the impact of productivity changes across generations both at the aggregate level and among regions, by tracking income and consumption behaviours of cohorts of households. Moreover, working with household rather than individual data, we adopt an appropriate equivalence scale in order to account for the different resources and needs of each family member; this problem is particularly significant for countries like Italy, in which the presence of multigenerational household is common. The empirical analysis is based on a series of repeated cross-sections of the Bank of Italy’s Survey of Household Income and Wealth (SHIW) for the period 1989-2002 and consists in the decomposition of the cohort, age and time effects of household’s income and consumption along the line of the works of Attanasio (1998), Jappelli and Modigliani (1998), Jappelli (1999) and Kapteyn et al. (2005). The results obtained in the benchmark model show an increase in the productivity of younger generations in the Central and Northern regions together with a positive and increasing age profile for consumption, while in the South the results are floating. The basic model is successively extended by including the demographic and socio-economic characteristics of the household. From the sensitivity estimations, it clearly emerges that household composition, working status and education levels significantly affect income fluctuations in the South, playing an active role in determining the persistency of growth rate differences among regions.

Habits, Complementarities and Heterogenenity in Alcohol and Tobacco Demand: A Multivariate Dynamic Model

In this paper we test the existence of rational habit formation in a multivariate model for alcohol and tobacco consumption. The theoretical framework, based on a dynamic adjustment cost model with forward-looking behaviour, is enhanced to include the intertemporal interactions between the two goods. The analysis of the within-period preferences completes the intertemporal model, allowing to evaluate the static substitutability/complementarity relationships. The empirical strategy consists in a two step estimation procedure. In the first stage, the parameters of the demand system are obtained, while in a second stage Euler equations are estimated by a dynamic fixed-effects panel data model. Estimation results, based on a cohort dataset constructed from a series of crosssections of the ISTAT Italian Household Budget Survey, reveal a significant complementarity relationship between alcohol and tobacco. The Euler system estimation does not reject the hypothesis of intertemporal dependence, providing support for a forward-looking behaviour in alcohol and tobacco consumption. Moreover, we find significant intertemporal interactions for tobacco adjustments, while alcohol consumption seems to follow only its own adjustment dynamics.alcohol and tobacco consumption, cohort data, adjustment cost model, intertemporal interactions, GMM.

Firms' exporting and importing activities: is there a two-way relationship?

The literature on firm heterogeneity and trade has highlighted that most trading firms tend to engage in both importing and exporting activities. This may be due to some common sunk costs or to a true state dependence. This paper provides some evidence that helps sort this issue out. Using firm level data for a group of 27 Eastern European and Central Asian countries from the World Bank Business Environment and Enterprise Performance Survey (BEEPS) over the period 2002-2008, we estimate a bivariate probit model of exporting and importing. The main finding is that there is a positive correlation between import and export at the level of the firm, but after controlling for size (and other firm level characteristics) importing have a positive effect on exporting, but exporting to not increase the probability of importing. The evidence is thus consistent with the presence of common sunk costs and with a one-way link between importing and exporting. The positive effect of import on export is mainly due to an increase in firm productivity and product innovation.Exports, Imports, Firm heterogeneity, Eastern European and Central Asian countries

University and inter-firm R&D collaborations: propensity and intensity of cooperation in Europe

This paper investigates the determinants of firms’ decision to cooperate in R&D with universities and the intensity of the cooperation effort, in relation to the engagement in inter-firm R&D collaborations. Using novel survey data for seven EU countries between 2007 and 2009, our analysis accounts for unobservable factors influencing R&D cooperation forms and addresses the main endogeneity issues. We find that internal knowledge, appropriability conditions and incoming spillovers explain large variation in the probability and in the intensity of R&D collaborations of European firms with universities (and comparably with unaffiliated companies)

A bivariate finite mixture growth model with selection

AbstractA model is proposed to analyze longitudinal data where two response variables are available, one of which is a binary indicator of selection and the other is continuous and observed only if the first is equal to 1. The model also accounts for individual covariates and may be considered as a bivariate finite mixture growth model as it is based on three submodels: (i) a probit model for the selection variable; (ii) a linear model for the continuous variable; and (iii) a multinomial logit model for the class membership. To suitably address endogeneity, the first two components rely on correlated errors as in a standard selection model. The proposed approach is applied to the analysis of the dynamics of household portfolio choices based on an unbalanced panel dataset of Italian households over the 1998–2014 period. For this dataset, we identify three latent classes of households with specific investment behaviors and we assess the effect of individual characteristics on households' portfolio choices. Our empirical findings also confirm the need to jointly model risky asset market participation and the conditional portfolio share to properly analyze investment behaviors over the life-cycle

The effects of public supports on business R&D: firm-level evidence across EU countries

Using homogenous firm-level data for the largest Member States of the EU over the period 2007-2009, we test whether manufacturing firms receiving R&D public supports (subsidies and/or tax incentives) spent more on R&D. The analysis is performed by means of both non-parametric (Propensity Score Matching) and parametric estimations (OLS and mixed-model system, with the latter accounting for the possible endogeneity of public supports). The hypothesis of full crowding-out of private with public funds (i.e. public support reduced privately-funded R&D expenses) is rejected for all countries, with the partial exception of Spain. However, we do not find evidence for the hypothesis of additionality of R&D subsidies (i.e. direct funding did not raise private R&D). These findings contrast with earlier works and might be due to the period under assessment, which covers the financial turmoil and the subsequent economic downturn. A focused analysis on France suggests that R&D tax credits exerted a positive impact on R&D. Overall, our findings indicate that, albeit they were not expansive, public supports avoided the reduction of firm R&D at the outset of financial crisis

Essays on the demand for addictive goods

Non DisponibileIn the last years, the analysis of the demand for addictive goods has received renewed and increasing interest. Since Becker and Murphy\u2019s (1998) fundamental contribution, theoretical and empirical studies have produced a large literature on the price and nonprice determinants of alcohol and tobacco demand. Theoretical and empirical studies on alcohol and tobacco consumption have drawn attention to two topics. On the one hand, one strand of literature has focused on the dynamics of addictive consumption and on the price responsiveness of the demand for addictive goods, analysing the intertemporal decisions of either myopic or far-sighted rational individuals. Empirical research on this topic has addressed the issues connected to the application of Becker and Murphy\u2019s (1988) rational addiction model, both with aggregated (Becker et al., 1994) and disaggregated (Chaloupka, 1991; Baltagi and Griffin, 1995, 2001; Baltagi and Geishecker, 2006) data. On the other hand, the growing availability of microdata at a high disaggregated level has allowed to model the censoring nature of alcohol and tobacco consumption, accounting for zero observations and simultaneously exploiting the richness of survey data information to control for heterogeneous individual (or household) behaviour (Jones, 1989; Blaylock and Blisard, 1992, 1993; Garcia and Labeaga, 1996; Yenand Jones, 1996). From a policy perspective, cross-sectional surveys enables to improve the knowledge of the impacts of demographic and socio-economic variables on alcohol and tobacco expenditure and help the design of public health programs to achieve drinking and smoking-reduction objectives. Recent developments in the analysis of addictive goods have followed three main directions. Firstly, some authors (Jimenez-Martin et al., 1998; Labeaga, 1999; Jones and Labeaga, 2003), using genuine and/or pseudo panel data, have tried to unify the two above-mentioned approaches, by explicitly dealing with the issues of measurement errors, unobserved individual heterogeneity and censoring in rational or myopic models of addiction. Secondly, the case of multiple addictive goods has been taken into account to analyze, together with own consumption dynamics, both intra-temporal and intertemporal interactions between goods. In particular, in the context of intertemporal analysis of addiction, it is worth remarking the works of Bask and Melkersson (2004), Pierani and Tiezzi (2005) and Fanelli and Mazzocchi (2006), that extend the rational habit formation model to consider the case of two addictive goods. Finally, following the works of Manski (1993, 1995), several studies have emphasized the importance of social interactions and peer effects on smoking and drinking decisions (Auld, 2005; Krauth, 2005; Powell et al., 2005). Social interactions are widely regarded as important determinants of many behavioural and economic outcomes, based on the idea that the utility that an individual receives from doing a certain activity depends on the actions of the other individuals in the person\u2019s reference group (Becker, 1996; Brock and Durlauf, 2001). In particular, the point at issue is to verify whether the average smoking or drinking behaviour in a group affects the behaviour of the individuals in that particular grou