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Low Income and Poor Health Choices: The Example of Smoking
Author(s) -
Binkley James
Publication year - 2010
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aaq036
Subject(s) - consumption (sociology) , economics , budget constraint , constraint (computer aided design) , low income , test (biology) , public economics , microeconomics , demographic economics , mechanical engineering , paleontology , social science , sociology , engineering , biology
Low‐income individuals often make relatively unhealthy consumption choices. In the case of food, this is often attributed to limited budgets. We investigate another possibility, motivated by the fact that smoking is more prevalent among those with low incomes, despite the cost. We develop a model in which income serves both as a budget constraint and as a source of future utility. We test the model by estimating logistic models of beginning and quitting smoking. We find support for the idea that low‐income consumers make less healthy choices because they face lower costs in terms of forgone future utility.