Risk and Time Preferences, Subjective Social Status, and Smoking Behaviors

Objectives: In the context of rapidly developing economies, socioeconomic changes bring about increased inequality, lower perceived social status, stress, and depression, all of which contribute to the high incidence of smoking. In this study, we investigate the linkages between social status and smoking behaviors. Methods: Using data from Indonesia, we use regression analysis to study the roles of socioeconomic factors and individual risk and time preferences in determining smoking behaviors. Results: We find that both objective and perceived social status matter, but the role of perceived social status is orders of magnitude larger than that of objective social status measures, such as income or education. Conclusions: Whereas traditional policies focused on income or education can be effective in reducing smoking, our results suggest that much more can be achieved through policies that target inequality and socioeconomic stress.