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Modelling Tobacco Consumption with a Zero-Inflated Ordered Probit Model

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Author Info
Mark N. Harris ()
Xueyan Zhao ()

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Abstract

Data 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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File URL: http://www.buseco.monash.edu.au/depts/ebs/pubs/wpapers/2004/wp14-04.pdf
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Paper provided by Monash University, Department of Econometrics and Business Statistics in its series Monash Econometrics and Business Statistics Working Papers with number 14/04.

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Length: 41 pages
Date of creation: Aug 2004
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Handle: RePEc:msh:ebswps:2004-14

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Related research
Keywords: Ordered outcomes; discrete data; drug consumption; zero-inflated responses.;

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Find related papers by JEL classification:
C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
D1 - Microeconomics - - Household Behavior
I1 - Health, Education, and Welfare - - Health

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Young, Trevor, 1983. "The Demand for Cigarettes: Alternative Specifications of Fujii's Model," Applied Economics, Taylor and Francis Journals, vol. 15(2), pages 203-11, April.
  2. Cameron, Lisa & Williams, Jenny, 2001. "Cannabis, Alcohol and Cigarettes: Substitutes or Complements?," The Economic Record, The Economic Society of Australia, vol. 77(236), pages 19-34, March. [Downloadable!] (restricted)
  3. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  4. Harris, Mark N & Loundes, Joanne & Webster, Elizabeth, 2002. "Determinants of Household Saving in Australia," The Economic Record, The Economic Society of Australia, vol. 78(241), pages 207-23, June. [Downloadable!] (restricted)
  5. J. Williams, 2004. "The effects of price and policy on marijuana use: what can be learned from the Australian experience?," Health Economics, John Wiley & Sons, Ltd., vol. 13(2), pages 123-137. [Downloadable!]
  6. Philip DeCicca & Donald Kenkel & Alan Mathios, 2002. "Putting Out the Fires: Will Higher Taxes Reduce the Onset of Youth Smoking?," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 144-169, February. [Downloadable!] (restricted)
  7. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
  8. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  9. William H. Greene, 1994. "Accounting for Excess Zeros and Sample Selection in Poisson and Negative Binomial Regression Models," Working Papers 94-10, New York University, Leonard N. Stern School of Business, Department of Economics.
  10. Mullahy, John, 1986. "Specification and testing of some modified count data models," Journal of Econometrics, Elsevier, vol. 33(3), pages 341-365, December. [Downloadable!] (restricted)
  11. Frank J. Chaloupka, 1991. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Lisa Farrell & Tim R. L. Fry & Mark N. Harris, 2003. "“A Pack A Day For Twenty Years”:Smoking And Cigarette Pack Sizes," Department of Economics - Working Papers Series 887, The University of Melbourne. [Downloadable!]
  13. Jeffrey E. Harris & Sandra W. Chan, 1999. "The continuum-of-addiction: cigarette smoking in relation to price among Americans aged 15-29," Health Economics, John Wiley & Sons, Ltd., vol. 8(1), pages 81-86.
  14. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kenneth W. Clements & Xueyan Zhao, 2005. "Economic Aspects of Marijuana," Economics Discussion / Working Papers 05-28, The University of Western Australia, Department of Economics. [Downloadable!]
  2. Brooks, Robert & Harris, Mark & Spencer, Christopher, 2007. "An Inflated Ordered Probit Model of Monetary Policy: Evidence from MPC Voting Data," MPRA Paper 8509, University Library of Munich, Germany. [Downloadable!]
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