Modelling Tobacco Consumption with a Zero-Inflated Ordered Probit Model
AbstractData for discrete ordered random variables are often characterised by "excessive" zero observations. Traditional ordered probit models have limited capacity in explaining the preponderance of zero observations, especially when the zeros may relate to two distinct situations of non-participation and infrequent participation (or consumption), for example. We propose a zero-inflated ordered probit (ZIOP) model using a double-hurdle combination of a split (probit) model and an ordered probit model which, potentially, relate to different sets of covariates. Monte Carlo results suggest that the new model performs well. Finally, the model is applied to a consumer choice problem of tobacco consumption.
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Bibliographic InfoPaper provided by Monash University, Department of Econometrics and Business Statistics in its series Monash Econometrics and Business Statistics Working Papers with number 14/04.
Length: 41 pages
Date of creation: Aug 2004
Date of revision:
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Other versions of this item:
- Xueyan Zhao & Mark Harris, 2004. "Modelling Tobacco Consumption with a Zero-Inflated Ordered Probit Model," Econometric Society 2004 Australasian Meetings 363, Econometric Society.
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- D1 - Microeconomics - - Household Behavior
- I1 - Health, Education, and Welfare - - Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-05 (All new papers)
- NEP-DCM-2004-09-05 (Discrete Choice Models)
- NEP-HEA-2004-09-05 (Health Economics)
- NEP-MIC-2004-09-05 (Microeconomics)
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