Economics

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An Examination of the Cross-Price Effects of Alcohol and Cigarettes
(2015) Schnall, Jill; Lambie-Hanson, Timothy
My thesis analyzes the cross-price effects of alcohol and cigarettes on different subpopulations. Specifically, I use a linear probability model to look at the change in the probability that a person drinks, smokes, drinks excessively and drinks moderately in response to a change in the price of beer, wine, and cigarettes. I also use OLS regression to look at the change in the average number of drinks per drinking occasion and the average number of drinks per month in response to a change in the price of beer, wine, and cigarettes. Results suggest that beer is a complement to cigarettes, whereas cigarettes are a substitute for alcohol. Additionally, I find that wine is a substitute for cigarettes.