Because, as documented in figure 2, it is mainly at the college margin that education seems to have an effect in decreasing smoking prevalence, the measure of education used in columns 1 to 4 of table 3 is the number of years of education above high school, so that individuals with no high school degree or just an high school degree are merged in the same category. In columns 7 and 8, the measure of education is an indicator for whether or not the individual is a college graduate or more. Columns 1 and 2 control for gender, race, family income, age at interview, birth cohort, and the date of the interview. The variable “trendmale” is included to account for the fact that over time, the positive difference in smoking prevalence between males and females has been decreasing (De Walque 2003). The measure of income is the logarithm of family income.<sup>20</sup> The results suggest that one year of college education decreases smoking prevalence by 4.0 percentage points and increases the probability of smoking cessation by 4.1 percentage points. These estimates, which are strongly significant, are consistent in magnitude with raw mean comparisons (see figure 2).

Columns 3 and 4 further control for the Vietnam veteran status of the individuals, but without controlling for income: while the coefficient on education remain in the same range, the results indicate that being a Vietnam veteran increases by 6.1 percentage points the probability of being a smoker, even after controlling for education, gender, race, age, birth cohort, and year of interview. This is a strong effect and will be discussed further, together with the instrumental variable approach. However, being a Vietnam veteran does not affect the probability of smoking cessation.

Columns 5 and 6 include controls for both income and actual Vietnam veteran status. The results indicate that, while income has a very significant negative effect on smoking prevalence and a positive one on the likelihood to have stopped smoking<sup>21</sup> , the negative effect of education on smoking is very robust to the inclusion of income as a control. There is, in the education variable, something more than the ability to generate a higher income, which explains the smoking decision.

Columns 7 and 8 uses the indicator for college graduate or more as an alternative measure of education, and yields consistent results, since the coefficient on the dummy for college graduate is roughly four times larger than the coefficient on one year of college education, both for smoking prevalence and the probability of quitting.

> 20 The National Health Interview Survey reports family income in $1,000 brackets between $1,000 and $20,000 and in $5,000 brackets between $20,000 and $50,000. The variable is top-coded at $50,000. Since the data comes from surveys ranging from 1983 to 1995, all reported incomes have been transformed in 1983 dollars using the inflation calculator of the Bureau of Labor Statistics.

> 21 Introducing the measure of current income in a regression of smoking cessation where, typically, the decision to quit smoking has been taken in the past, might seem peculiar, unless current income is considered as a proxy for permanent income. To maintain the parallelism with the regressions on current smoking behavior, this specification is still presented (columns 2 and 6), but a specification without income as a control (column 4) is also available.

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