THE DURATION OF THE SMOKING HABIT

I investigate the determinants of the hazard rates of both starting and quitting the cigarette smoking habit. The model is an ordered probit split-sample duration model with lagged duration dependence and time-varying covariates (cigarette price and regulation). Duration of the smoking habit is approximately unitary elastic with respect to cigarette price. The hazard rate of starting smoking peaks sharply and quickly declines before age 20. Both nonparametric and parametric results indicate that the quitting hazard rate rises with the habit's duration, a result at odds with survey data but consistent with the economic model of rational addiction. (JEL C41, 112)