Reports from Lancaster University Advance Knowledge in Economics (Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction)

2019 FEB 19 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Investigators discuss new findings in Economics. According to news originating from Lancaster, United Kingdom, by NewsRx correspondents, research stated, “We propose a dynamic panel data approach to estimate a model that integrates the Becker-Murphy theory of rational addiction with the Grossman model of health investment. We define an individual’s lifetime smoking consumption and investments in health capital as simultaneous choices within a single optimisation problem.”

Financial support for this research came from Economic and Social Research Council (ESRC).

Our news journalists obtained a quote from the research from Lancaster University, “We show that this can be estimated using GMM system estimation of two stand-alone single fourth-order difference equations of health capital and smoking. These preserve roots and fundamental dynamics of the original system of four interrelated first-order equations. Monte Carlo simulations confirm that this reduced-form dynamic estimation also produces very similar estimates to the ones of the initial system of equations.”

According to the news editors, the research concluded: “We argue that, in the presence of long panel data, this approach may provide a feasible alternative for the estimation of a complex life-cycle model of human capital.”

For more information on this research see: Dynamic panel data estimation of an integrated Grossman and Becker-Murphy model of health and addiction. Empirical Economics, 2019;56(2):703-733. Empirical Economics can be contacted at: Physica-Verlag Gmbh & Co, PO Box 10 52 80, 69042 Heidelberg, Germany. (Springer - www.springer.com; Empirical Economics - http://www.springerlink.com/content/0377-7332/)

The news correspondents report that additional information may be obtained from E. Zucchelli, University of Lancaster, Div Hlth Res, Lancaster LA1 4YG, United Kingdom. Additional authors for this research include A.M. Jones, N. Rice and A. Laporte.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s00181-017-1367-6. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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