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A Double-Hurdle Approach to Modelling Tobacco Consumption in Italy

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Author Info
David Aristei
Luca Pieroni

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Abstract

This paper analyses the determinants of tobacco expenditures for a sample of Italian households. A Box- Cox double-hurdle model adjusted for heteroscedasticity is estimated to account for separate individual decisions concerning smoking participation and tobacco consumption and to correct for non-normality in the bivariate distribution of the error terms. Nested univariate and bivariate models are found to be excessively restrictive, supporting the adequacy of a generalized specification. Estimation results show that consumption decisions are significantly affected by income and demographic characteristics. In particular, income positively impacts tobacco expenditure, while participation probability substantially declines as age increases. The existence of significant gender differences in both smoking participation and tobacco consumption patterns is found, while high education and white collar occupation reduce the likelihood to smoke and tobacco expenditure levels. Single adult households have a lower probability of smoking initiation even if, conditional on smoking, they consume more. Finally, complementarity between tobacco and alcohol beverages suggests the necessity of joint public health strategies.

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Publisher Info
Paper provided by Università di Perugia, Dipartimento Economia, Finanza e Statistica in its series Quaderni del Dipartimento di Economia, Finanza e Statistica with number 29/2007.

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Length: 34 pages
Date of creation: 15 Mar 2007
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Handle: RePEc:pia:wpaper:29/2007

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Related research
Keywords: tobacco consumption; double-hurdle models; limited dependent variables; Box-Cox transformation;

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Find related papers by JEL classification:
C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

References listed on IDEAS
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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. David Aristei & Luca Pieroni, 2009. "Addiction, social interactions and gender differences in cigarette consumption," Empirica, Springer, vol. 36(3), pages 245-272, August. [Downloadable!] (restricted)
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