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Yi-Chi Chen and Chang-Ching Lin
 
''Threshold Effects in Cigarette Addiction: An Application of the Threshold Model in Dynamic Panels''
( 2010, Vol. 30 No.4 )
 
 
We adopt the threshold model of myopic cigarette addiction to US state-level panel data. The threshold model is used to identify the structural effects of cigarette demand determinants across the income stratification. Furthermore, we apply a bootstrap approach to correct for the small-sample bias that arises in the dynamic panel threshold model with fixed effects. Our empirical results indicate that there exists the heterogeneity of smoking dynamics across consumers.
 
 
Keywords: Cigarettes demand, price elasticity, threshold regression model, dynamic panel model, bias correction, bootstrap
JEL: C2 - Single Equation Models; Single Variables: General
I1 - Health: General
 
Manuscript Received : Apr 25 2010 Manuscript Accepted : Nov 24 2010

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