Alcohol consumption, smoking and wages

Lye, Jenny; Hirschberg, Joe

doi:10.1080/00036840410001710645

Cited by 36 publications

(39 citation statements)

References 35 publications

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“…Findings showing that moderate drinkers are better off in terms of household income is similar to that of previous studies, but income of heavy drinkers is higher which is in contrast to most previous findings ( Hirschberg, 2004;Zarkin et al, 1998). The difference between the income of moderate and heavy drinkers is however very small.…”

Section: Resultssupporting

confidence: 85%

The effect of alcohol consumption on household income in Ireland

Ormond

Murphy

2016

Alcohol

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This paper presents a study of the effects of alcohol consumption on household income in Ireland using the Slán National Health and Lifestyle Survey 2007 dataset, accounting for endogeneity and selection bias. Drinkers are categorised into one of four categories based on the recommended weekly drinking levels by the Irish Health Promotion Unit; those who never drank, non-drinkers, moderate and heavy drinkers. A multinomial logit OLS Two Step Estimate is used to explain individual's choice of drinking status and to correct for selection bias which would result in the selection into a particular category of drinking being endogenous. Endogeneity which may arise through the simultaneity of drinking status and income either due to the reverse causation between the two variables, income affecting alcohol consumption or alcohol consumption affecting income, or due to unobserved heterogeneity, is addressed. This paper finds that the household income of drinkers is higher than that of non-drinkers and of those who never drank. There is very little difference between the household income of moderate and heavy drinkers, with heavy drinkers earning slightly more. Weekly household income for those who never drank is €454.20, non-drinkers is €506.26, compared with €683.36 per week for moderate drinkers and €694.18 for heavy drinkers

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Section: Resultssupporting

confidence: 85%

The effect of alcohol consumption on household income in Ireland

Ormond

Murphy

2016

Alcohol

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“…Regarding smoking behavior, Levine et al (1997), Heineck and Schwarze (2003), Van Ours (2004), Auld (2005), Braakmann (2008) and Anger and Kvasnicka (2010) report the existence of a wage penalty attached to smoking, ranging from 2 % to 24 %. As far as alcohol consumption is concerned, empirical studies point also to a correlation, but of a positive sign (see Van Ours, 2004;Lye and Hirschberg, 2004;Auld, 2005). Hence, in the light of those studies, one can hardly consider that the di¤erent types considered so far are homogeneous in terms of earnings.…”

Section: Double Heterogeneity and Linear Taxationmentioning

confidence: 99%

“…Take, for instance, the case of alcohol consumption. As mentioned in Section 1, Van Ours (2004), Lye and Hirschberg (2004), and Auld (2005) all report the existence of positive correlation between (moderate) alcohol consumption and individual earnings. Given the existence of such an alcohol premium, the sign of cov (V 0 (x) ; y) is likely to be negative, which supports, ceteris paribus, a larger tax on alcohol.…”

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confidence: 99%

“…More recently, Anger and Kvasnicka (2010) con…rm the existence of a 4 to 10 % wage penalty for current smokers in comparison to never-smokers. Regarding alcohol consumption, empirical studies point also to a correlation, but of a positive sign (see Van Ours 2004;Lye and Hirschberg 2004;Auld 2005). Those studies justify the introduction of heterogeneity in individual earnings as an essential aspect of the design of optimal sin taxes.…”

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confidence: 99%

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Myopia, regrets, and risky behaviors

Ponthière

2011

Int Tax Public Finance

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This paper examines how a government should intervene when agents make choices having long-term detrimental e¤ects on their life expectancy. For that purpose, we consider an economy where some agents consume a sin good (reducing their survival chances) out of myopia, and regret their choices later on, whereas other agents make, because of their impatience, the same risky choices, which they never regret. We argue that, in the …rst-best, a government should only interfere with behaviors that agents will regret, but not with other behaviors. In the second-best, asymmetric information and redistributive concerns imply interferences not only with myopic behaviors, but also with impatience-based (rational) behaviors. Finally, we introduce heterogeneity in individual earnings, and show that the optimal tax on the sin good depends on the size of the myopic group, on the reactivity of sin good consumption to tax changes, and on the extent to which sin good consumption is correlated with labor earnings.

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“…The majority of the literature compares wages of current smokers with everybody else (Lye and Hirschberg 2004, Van Ours 2002, Heineck and Schwarze 2003. Levine et al (1997) compares wages of smokers only with those who quit smoking.…”

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confidence: 99%

Forgone Earnings From Smoking : Evidence For A Developing Country

Lokshin¹,

Beegle²

2006

Policy Research Working Papers

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This paper estimates the economic losses related to the negative effect of smoking on wages in a context of a developing country. Using data from 2005 Albania Living Standards Monitoring Survey, we jointly estimate a system of three equations: the smoking decision and two separate wage equations for smokers and non-smokers. The results show that, after controlling for observed characteristics and taking into account unobserved heterogeneity in personal characteristics, smoking has a substantial negative impact on wages. On average smokers' wages are 20 percent lower than the wages of similar non-smokers, providing strong evidence for the potential policy relevance of tobacco control initiatives for developing countries. September 4, 2006* The findings and interpretation of this paper are those of the authors and should not be attributed to the World Bank Group, its Executive Directors, or the countries they represent. Address for correspondence: Michael M. Lokshin, Kathleen Beegle, IntroductionIn 2000, about one out of three adults, or 1.1 to 1.2 billion people worldwide, smoked (WHO 1999). By 2010 the number of smokers is expected to grow to around 1.3 billion (FAO 2003). The vast majority of the world's smokers (82 percent) live in developing countries where, in sharp contrast to developed countries, the consumption of tobacco is on the rise. Tobacco control is increasingly seen as a public health priority, motivating campaigns such as the World Health Organization's Tobacco Free Initiative as well as country-specific tobacco control campaigns. These efforts are justified not only on grounds related to well-established adverse effects of smoking on health, but more generally on economic grounds. 1 The gross healthcare cost of smoking for the developing countries is estimated to be as high as 1.1 percent of GDP (Jha and Chaloupka 2000). The economic costs associated with losses in productivity because of smoking could be at least as large and be disproportionately incurred by the poor (The World Bank 1999).Estimates of the economic costs of smoking tend to reflect costs associated with increased premature death and health-care costs related to smoking-induced chronic diseases (which can affect smokers as well as non-smokers exposed to smoke). In addition to these pathways, there is a third category of costs that has been considered: the earnings and wage reductions associated with smoking. The literature on the relationship between smoking and labor market performance is very limited and based on data from Western Europe and the US. Berger and Leigh (1989) examine the effect of smoking and being overweight on earnings using the 1973 Quality of Employment survey in the US.Their study finds no statistically significant association between smoking and earnings for male and female workers. Levine et al. (1997) The WHO estimates that tobacco is the second major cause of death worldwide and the fourth most common risk factor for disease worldwide.3 model specification, the estimated losses in earnings fo...

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Alcohol consumption, smoking and wages

Cited by 36 publications

References 35 publications

The effect of alcohol consumption on household income in Ireland

The effect of alcohol consumption on household income in Ireland

Myopia, regrets, and risky behaviors

Forgone Earnings From Smoking : Evidence For A Developing Country

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