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Osman Abbasoglu received his B.A. in Economics from Bogazici University, Turkey. He is currently a PhD candidate at the department of Economics in University of Southern California. His research interests are quantitative macroeconomics, health economics and policy and heterogeneous agent models.

In his paper, he uses an overlapping generations (OLG) model with endogenous health capital accumulation, where smoking affects the rate at which health capital depreciates and households accumulate health capital by investing on health, i.e., by making medical expenditures. He calibrates the model to match the key features of the U.S. economy.

Preliminary quantitative exercises show that excise taxation on smoking helps reduce the medical expenditures and initial health conditions explain a significant portion of the difference in medical expenditures-GDP ratio between the U.S. and Europe.