Home > Research > Publications & Outputs > Dynamic panel data estimation of an integrated ...

Research

Associated organisational unit

Electronic data

  • GBMpaper_EE_301017_final-copy

    Rights statement: The final publication is available at Springer via http://dx.doi.org/10.1007/s00181-017-1367-6

    Accepted author manuscript, 331 KB, PDF document

    Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License

Links

Text available via DOI:

Keywords

View graph of relations

Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Published

Standard

Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction. / Jones , Andrew M.; Laporte, Audrey ; Rice, Nigel et al.
In: Empirical Economics, Vol. 56, No. 2, 02.2019, p. 703–733.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Jones , AM, Laporte, A, Rice, N & Zucchelli, E 2019, 'Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction', Empirical Economics, vol. 56, no. 2, pp. 703–733. https://doi.org/10.1007/s00181-017-1367-6

APA

Jones , A. M., Laporte, A., Rice, N., & Zucchelli, E. (2019). Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction. Empirical Economics, 56(2), 703–733. https://doi.org/10.1007/s00181-017-1367-6

Vancouver

Jones AM, Laporte A, Rice N, Zucchelli E. Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction. Empirical Economics. 2019 Feb;56(2):703–733. Epub 2018 Jan 18. doi: 10.1007/s00181-017-1367-6

Author

Jones , Andrew M. ; Laporte, Audrey ; Rice, Nigel et al. / Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction. In: Empirical Economics. 2019 ; Vol. 56, No. 2. pp. 703–733.

Bibtex

@article{542c69d4af274e2c92e31193606118ab,
title = "Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction",
abstract = "We propose a dynamic panel data approach to estimate a model that integrates the Becker-Murphy theory of rational addiction with the Grossman model of health investment. We define an individual{\textquoteright}s lifetime smoking consumption and investments in health capital as simultaneous choices within a single optimisation problem. We show that this can be estimated using GMM system estimation of two stand-alone single fourth-order difference equations of health capital and smoking. These preserve roots and fundamental dynamics of the original system of four interrelated first-order equations. Monte Carlo simulations confirm that this reduced-form dynamic estimation also produces very similar estimates to the ones of the initial system of equations. We argue that, in the presence of long panel data, this approach may provide a feasible alternative for the estimation of a complex life-cycle model of human capital.",
keywords = "Addiction, Health capital, Smoking, Dynamic panel data models",
author = "Jones, {Andrew M.} and Audrey Laporte and Nigel Rice and Eugenio Zucchelli",
note = "The final publication is available at Springer via http://dx.doi.org/10.1007/s00181-017-1367-6",
year = "2019",
month = feb,
doi = "10.1007/s00181-017-1367-6",
language = "English",
volume = "56",
pages = "703–733",
journal = "Empirical Economics",
issn = "0377-7332",
publisher = "Springer-Verlag",
number = "2",

}

RIS

TY - JOUR

T1 - Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction

AU - Jones , Andrew M.

AU - Laporte, Audrey

AU - Rice, Nigel

AU - Zucchelli, Eugenio

N1 - The final publication is available at Springer via http://dx.doi.org/10.1007/s00181-017-1367-6

PY - 2019/2

Y1 - 2019/2

N2 - We propose a dynamic panel data approach to estimate a model that integrates the Becker-Murphy theory of rational addiction with the Grossman model of health investment. We define an individual’s lifetime smoking consumption and investments in health capital as simultaneous choices within a single optimisation problem. We show that this can be estimated using GMM system estimation of two stand-alone single fourth-order difference equations of health capital and smoking. These preserve roots and fundamental dynamics of the original system of four interrelated first-order equations. Monte Carlo simulations confirm that this reduced-form dynamic estimation also produces very similar estimates to the ones of the initial system of equations. We argue that, in the presence of long panel data, this approach may provide a feasible alternative for the estimation of a complex life-cycle model of human capital.

AB - We propose a dynamic panel data approach to estimate a model that integrates the Becker-Murphy theory of rational addiction with the Grossman model of health investment. We define an individual’s lifetime smoking consumption and investments in health capital as simultaneous choices within a single optimisation problem. We show that this can be estimated using GMM system estimation of two stand-alone single fourth-order difference equations of health capital and smoking. These preserve roots and fundamental dynamics of the original system of four interrelated first-order equations. Monte Carlo simulations confirm that this reduced-form dynamic estimation also produces very similar estimates to the ones of the initial system of equations. We argue that, in the presence of long panel data, this approach may provide a feasible alternative for the estimation of a complex life-cycle model of human capital.

KW - Addiction

KW - Health capital

KW - Smoking

KW - Dynamic panel data models

U2 - 10.1007/s00181-017-1367-6

DO - 10.1007/s00181-017-1367-6

M3 - Journal article

VL - 56

SP - 703

EP - 733

JO - Empirical Economics

JF - Empirical Economics

SN - 0377-7332

IS - 2

ER -