How different are smokers? An analysis based on personal finances

We study the association between smoking status and individual decisions, focusing on outcomes in the domain of personal finance. The study draws information on demographic variables, various financial outcomes including individual credit scores, time and risk preferences, and personality traits, from both population data and experimental data. The results suggest that smokers make poor decisions and experience worse outcomes with personal finances vis-à-vis non-smokers. This relationship is robust to controlling for a myriad of variables, including characteristics that are known to be correlated with smoking. Thus, smoking status contains more precise information about individuals that are not fully captured by available noisy economic and psychological measures. Since available estimates of personality traits have substantial measurement error, smoking status may effectively capture residual information.