Behavioral Economics Commons^™

This paper provides estimates of tobacco price elasticity explicitly distinguishing between two price effects: the direct effect, reflecting individual reaction to a price change, and the indirect effect, whereby price influences the individual by changing community smoking behavior. Canada's Aboriginal communities are small and secluded, allowing for plausible identification of reference groups on a relatively large scale. Estimates suggest a 10 percent increase in price decreases daily smoking by 0.91 percentage points (2.11 percent), occasional smoking by 1.24 percentage points (8.27 percent) and average smoking intensity by 0.15 cigarettes per day (2.9 percent). It is found that the indirect effect …

We explore the link between affluence and well-being using a simple general equilibrium model with a pure Veblen good. Individuals derive utility from the pure Veblen good based solely on how much they consume relative to others. In equilibrium, consumption of the pure Veblen good is the same for everyone, so the Veblen good contributes nothing to utility. Hence, resources devoted to the Veblen good provide us with a measure of deadweight loss. We ask: Under what preference conditions does the proportion of productive capacity devoted to the pure Veblen good increase as an economy becomes more affluent? In a …

We investigate the impact of Canada’s means-tested and universal public pension programs on the mortality rates of recipient age groups for the period 1921–1966. We find that only the universal program significantly reduced recipient age group mortality rates. The implied social value of the mortality risk reduction from this program is onetenth of the value per statistical life associated with contemporary government policy, meaning that Canadians did not need to place a high value on the life of a senior to justify the higher cost of the universal program.