The rational addiction model is usually tested by estimating a linear second-order difference Euler equation, which may … rational addiction model. It is also empirically convenient because it is simple, it allows using efficient estimation … application, we estimate the demand for smoking in the US from 1970 to 2016, and we show that it is consistent with the rational …

, is discussed. The issues include: how represent addiction, how handle unobserved expectations and changing plans, how … testing the 'rational addiction' hypothesis, by using linear, single-equation autoregressive models, as suggested by Becker …

, is discussed. The issues include: how represent addiction, how handle unobserved expectations and changing plans, how … testing the `rational addiction' hypothesis, by using linear, single-equation autoregressive models, as suggested by Becker …, Grossman, and Murphy (1994) and adopted in several following studies. -- Life-cycle model ; Addiction ; Identification ; Latent …