Abstract
Smoking is a major public health concern with significant social and economic costs. A large literature has established that smoking behavior and mental health are correlated. This study considers the role of mental health in causing people to smoke, and examines how a specific traumatic event, a close friend's death, which negatively affects mental health, affects the tendency to smoke. The results show that good mental health reduces the probability of being a smoker. This conclusion is robust to various ways of addressing the endogeneity of mental health, including the use of both internal and external instruments, two-stage residual inclusion estimation, and dynamic panel methods. As such it underscores the power of people's mental health in shaping their smoking behavior.
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