Heterogeneous Rates of Time Preference and the Decision to Smoke

Individuals with higher personal rates of time preference will be more likely to smoke. Although previous studies have found no evidence of a relationship between smoking and rates of time preference, analysis of implicit rates of discount associated with workers' wage-fatality risk tradeoffs indicates that smokers have higher rates of time preference with respect to years of life. Current smokers have an implied discount rate of 13.9%, as compared to 8.1% for nonsmokers. Current smokers who are blue-collar workers have rates of time preference with respect to years of life of 16.4% compared to 7.9% for nonsmoking blue-collar workers