This paper adopts a multi-commodity habit formation model to study whether unhealthy behaviours are related, i.e. whether there are contemporaneous and inter temporal complementarities in Italian consumption of alcohol and tobacco. Own and crossprice elasticities, as well as the income...

A pseudo-panel of Italian single households is used to test for rational addiction in alcohol consumption. These monthly consumption data raise problems of measurement errors and unobservable heterogeneity. To deal with the zeros in the dependent variable we adopt a specification based on...

A panel of Italian single households is used to test for rational addiction in alcohol consumption. These monthly consumption data raise problems of measurement errors and unobservable heterogeneity. To deal with the zeros in the dependent variable we adopt a specification based on infrequency...

This paper deals with one of the main theoretical and empirical problems associated with the rational addiction model, namely that the demand equation derived from the rational addiction theory is not empirically distinguishable from models with forward-looking behavior, but with...