As with most analyses involving microdata, applications of count data models must somehow account for unobserved heterogeneity. The count model literature has generally assumed that unobservables and observed covariates are statistically independent. Yet for many applications this independence assumption is clearly tenuous. When the unobservables are omitted variables correlated with included regressors, standard estimation methods will generally be inconsistent. Though alternative consistent estimators may exist in special circumstances, it is suggested here that a nonlinear instrumental-variable strategy offers a reasonably general solution to such estimation problems. This approach is applied in two examples that focus on cigarette smoking behavior.

This article reports on an empirical analysis of the relationships between alcoholism and income and working. We show that the relationships between alcoholism and labor market success have important age or life-cycle dimensions. We present evidence that alcoholism may affect income more by restricting labor market participation than by affecting the wages of workers. Finally, we demonstrate that the effects of alcoholism on earnings depend on the extent to which one controls for other covariates associated with alcoholism; as such, we suggest that there may be important indirect as well as direct effects of alcoholism on labor market success.

Little is known about the role of specific health problems in affecting labor market productivity. Even less is known about gender differences in the labor market effects of such health problems. Current knowledge of health effects is based largely on samples composed exclusively of men, a common practice in both economics and health research. In the latter case, even a congressional mandate to incorporate females in study samples is reputed to have had little effect (Patricia Schroeder, 1990). In this study, we attempt to determine the structure of gender differences in labor market responses to alcoholism. We use a relatively new data source that allows such comparisons by gender in a large community-based sample. Previous studies have established that there are significant gender differences in labor market behavior. Differences in prevalence rates of alcoholism by gender are also well established. It is estimated that 3 percent of females are currently suffering from alcoholism and twice that many have exhibited symptoms at some time; for males the numbers are 10 and 20 percent, respectively. There is some medical evidence to indicate that physiologically, women and men respond differently to alcohol. For example, a recent study suggests that women have greater vulnerability to the acute and chronic health conditions associated with alcoholism (Mario Frezza et al., 1990).