TY - JOUR
T1 - Economic Policy Uncertainty and Self-Control
T2 - Evidence from Unhealthy Choices
AU - Kalcheva, Ivalina
AU - McLemore, Ping
AU - Sias, Richard
N1 - Publisher Copyright:
© 2021 Cambridge University Press. All rights reserved.
PY - 2021/6
Y1 - 2021/6
N2 - We hypothesize that greater economic policy uncertainty (EPU) leads to increases in unhealthy behaviors by lowering individuals' impulse control. Based on 6.1 million interviews over 22 years, our analysis reveals a positive relation between EPU and the propensity to make poor lifestyle choices, including higher rates of alcohol consumption, a larger number of drinks consumed, and greater binge drinking. EPU has long-lasting effects on drinking behavior, consistent with habit formation. Moreover, the relation is stronger for younger individuals whose habits are more malleable. We find similar results when using smoking rates to measure unhealthy choices.
AB - We hypothesize that greater economic policy uncertainty (EPU) leads to increases in unhealthy behaviors by lowering individuals' impulse control. Based on 6.1 million interviews over 22 years, our analysis reveals a positive relation between EPU and the propensity to make poor lifestyle choices, including higher rates of alcohol consumption, a larger number of drinks consumed, and greater binge drinking. EPU has long-lasting effects on drinking behavior, consistent with habit formation. Moreover, the relation is stronger for younger individuals whose habits are more malleable. We find similar results when using smoking rates to measure unhealthy choices.
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U2 - 10.1017/S0022109020000265
DO - 10.1017/S0022109020000265
M3 - Article
AN - SCOPUS:85085950033
SN - 0022-1090
VL - 56
SP - 1446
EP - 1475
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 4
ER -