addiction. In contrast to prior research, we allow individuals to make their consumption decisions simultaneous with savings and … labor supply. When addictive goods have a stronger habit formation effect (an addiction effect'), individuals choose to save … less due to the anticipated adverse health consequences of addiction (a detrimental health effect'). This is particularly …

A standard model of addictive process is Becker and Murphy's rational addiction' model, which has the key empirical … per pack of cigarettes should be at least one dollar higher under our formulation than in the rational addiction case …

restrictions implied by asset pricing theory. We treat the functional form of the habit as unknown, and to estimate it along with …

, in that they are more likely to postpone earlier plans for retirement. The evidence and theory suggest that the negative …

We use a framework suggested by a model of rational addiction to analyze empirically the demand for cigarettes. The … results provide support for the implications of a rational addiction model that cross price effects are negative (consumption …