Module 2: Demand for Cigarettes and Instrumental Variables
The goal of this module is to understand instrumental variables as a causal identification strategy. We’ll do this in the context of smoking and cigarette prices. Effectively, we want to estimate a demand curve for cigarettes, accounting for the fact that price is an outcome of the demand function and therefore endogenous.
Readings and other links
Links to papers are listed alongside the full reference. PDFs of each paper are also available on Canvas.
- Required readings for this module:
- Chapter 7 of Causal Inference: The Mixtape
- Chapter 19 of The Effect: An Introduction to Research Design and Causality
- Supplemental information and readings:
- Chapter 4 of J. Angrist and J. Pischke, Mostly Harmless Econometrics (Princeton, NJ: Princeton University Press, 2009).
- Jonathan Gruber, “Tobacco at the Crossroads: The Past and Future of Smoking Regulation in the United States,” Journal of Economic Perspectives 15, no. 2 (2001): 193–212. Paper link here.
- Hana Ross and Frank J Chaloupka, “The Effect of Cigarette Prices on Youth Smoking,” Health Economics 12, no. 3 (2003): 217–230. Paper link here
- Data for this module: