Abstract
I use Chinese panel data to estimate the exogenous effect of economic growth on individuals’ smoking behavior. By instrumenting the endogenous provincial GDP growth rate with a dummy variable indicating whether the province has a new leader, my results show that a higher economic growth rate reduces overall cigarette consumption, but does not reduce the overall smoking participation rate. In addition, a higher economic growth rate reduces cigarette consumption of male but not female. It reduces cigarette consumption of the lower-middle and senior age males, but does not significantly change consumption among the young males. Of these three groups, only the middle-aged males show a decrease in their smoking participation rate with higher economic growth. Overall, the Chinese data show that economic expansion reduces men’s smoking amount. But the overall adjustment is intensive, rather than extensive.
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Notes
The Li Index estimates GDP growth based on Chinese electricity production, rail cargo shipments, and the distribution of loans. The index is named after Keqiang Li, the current Prime Minister of China.
This is a set of dummy variables for each quarter in each year.
For instance, the first quarter in the sample is the second quarter of 2010 (denoted as 1). The third quarter of 2010 is denoted as 2. The third quarter of 2012 is denoted as 10.
The starting time of a leader’s term of office is accurate to the day. The survey time is denoted as the end date of the quarter in which the interview took place. For instance, in the first quarter of the survey (the second quarter of 2010), the leader of Beijing was Qi Liu, whose took office on October 22, 2002. Therefore, the number of years at the time of the survey is equal to \(2010.5-2002.811=7.789\).
I do not include provincial-level dummy variables because there are too few people in the sample moving across provinces. Thus, provincial-level dummy variables are omitted because of multicollinearity with the individual-level fixed effects.
Actually, from 2010 to 2016, only a few big cities in China followed the tobacco control order of the central government. And there was few health campaign in China.
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Acknowledgements
I thank my advisers Professor Jennifer Hunt and Professor Anne Piehl for the selfless instruction they provided to me. I thank Professor Roger Klein who gave me inspiring instruction on econometrics. I thank Professor Hillary Sigman, Professor Mark Killingsworth, Professor Bingxiao Wu and my classmates Yixiao Jiang, Yilin Wu, Vladimir Kolchin, Kihwan Bae who gave me valuable comments when completing this paper. The opinions, findings and conclusions expressed are those of the author and do not necessarily reflect the views of his advisor and department of economics at Rutgers University.
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Yang, Y. Does economic growth induce smoking?—Evidence from China. Empir Econ 63, 821–845 (2022). https://doi.org/10.1007/s00181-021-02155-8
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DOI: https://doi.org/10.1007/s00181-021-02155-8