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Zero observations and gender differences in cigarette consumption

  • Steven Yen
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    Censoring mechanisms and gender differences are investigated for cigarette consumption by individuals in the USA. The Gaussian single-hurdle model is proposed which generalizes the specifications of Cragg (1971) and Heckman (1979) and allows examination of the empirical relevance of the two censoring mechanisms in the existing double-hurdle model. The proposed model performs better than Cragg's and Heckman's models but not as well as the double-hurdle model and also produces different elasticity estimates. The hypothesis of equal consumption parameters is rejected and demand elasticities found to differ between men and women. Income does not play a role and age has conflicting effects on the probability and level of cigarette smoking. Older individuals are less likely to smoke but, conditional on smoking, consume more cigarettes than their younger counterparts. Education has negative effects on the probability and level of smoking and can be an effective tool to curtail cigarette smoking.

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    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 37 (2005)
    Issue (Month): 16 ()
    Pages: 1839-1849

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    Handle: RePEc:taf:applec:v:37:y:2005:i:16:p:1839-1849
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    1. Fry, Vanessa & Pashardes, Panos, 1994. "Abstention and Aggregation in Consumer Demand: Zero Tobacco Expenditures," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 502-18, July.
    2. Chaloupka, Frank, 1991. "Rational Addictive Behavior and Cigarette Smoking," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 722-42, August.
    3. James Tobin, 1956. "Estimation of Relationships for Limited Dependent Variables," Cowles Foundation Discussion Papers 3R, Cowles Foundation for Research in Economics, Yale University.
    4. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
    5. Andrew M Jones, 1995. "A microeconometric analysis of smoking in the UK health and lifestyle survey," Working Papers 139chedp, Centre for Health Economics, University of York.
    6. Labeaga, Jose M., 1999. "A double-hurdle rational addiction model with heterogeneity: Estimating the demand for tobacco," Journal of Econometrics, Elsevier, vol. 93(1), pages 49-72, November.
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