3.3. Estimation
We examine the impact of risk perceptions (qij) on decisions
smokers make about quitting versus continuing to smoke (Yi). The
basic (second stage) relationship is given by
Yi = ˛0 + ˛1qij + ˛2Xi + εi (2)
where Xi is a vector of control variables for individual i including
age, education, race, marital status, income, self-reported health,
risk-taking, and financial planning horizon; εi is the error term.15
We include community fixed effects to control for unobserved
neighborhood effects and account for clustering at the level of the
community using Huber–White corrected standard errors