The Effect of Smoking on Alcohol Consumption: Complements or Substitutes?∗

This paper examines the effect of quitting smoking on alcoholic beverage consumption using the Lung Health Study, a randomized smoking cessation program that strongly reduces smoking participation. The health literature suggests that both behaviors affect similar brain regions and are consumed together. So far, the economics literature has presented inconclusive causal evidence on the relationship. Building on the theory of rational addiction, I estimate the relationship between smoking and alcohol consumption using several different smoking variables. I report four salient findings. First, selfreported and clinically verified smoking variables suggest that quitting smoking lowers alcoholic beverages consumption by 11.5%. Second, continuously abstaining from smoking for 12 months reduces alcoholic beverage consumption by 27.5% per week. Third, non-smoking for 12 months also reduces the probability of drinking any alcoholic beverages by 31%. Fourth, I demonstrate that most of my results are unchanged over the long-run. The findings suggest that smoking and drinking are complements in consumption. JEL codes: I1,I12,I18 ∗I thank Rusty Tchernis, Charles Courtemanche, Tom Mroz, Ian McCarthy, and seminar participants at Georgia State University and Western Economic Association International for helpful feedback. †Department of Economics, Georgia State University. Email: [email protected]