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A censored system of cigarette and alcohol consumption

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  • Shew-Jiuan Su
  • Steven Yen

Abstract

Many previous studies of US cigarette and alcohol consumption have focused on single equations. However, the addictive nature of consumption suggests that it is more appropriate to model these products as a system. We propose a two-step estimation procedure and apply the procedure to a system of equations for cigarette, beer and wine consumption. Results differ from those derived from an existing two-step procedure. Findings suggest that consumption of cigarettes, beer and wine is responsive to income changes but the elasticities are rather small. Personal physiques, education, age, race, ethnicity, health, gender, employment status, and regions also play significant roles in consumption.

Suggested Citation

  • Shew-Jiuan Su & Steven Yen, 2000. "A censored system of cigarette and alcohol consumption," Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 729-737.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:6:p:729-737 DOI: 10.1080/000368400322354
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