This paper deepens the empirical analysis of peer networks by considering simultaneously their effects smoking
participation and smoking intensity. Peer network is key in determining the smoking behaviour of youths, but
the magnitude of the effects is still debated, questioned and inconclusive. I used a control function approach,
a two-step least square and the fixed effect method to address the potential endogeneity of peer network. The
results suggest positive and significant peer effects on smoking participation and intensity. While the magnitude
of the estimates of smoking participation varies across methodological approaches (ranging between 4 and 20
percent), that of smoking intensity ranges between 3 and 22 percent. Including older adults in the peer reference
group increases the peer effects. The findings suggest that policies (excise tax) that directly affect the decision
to smoke and the smoking intensity of the peer reference group are likely to affect own smoking behaviour.