IDEAS home Printed from https://ideas.repec.org/p/pia/wpaper/29-2007.html
   My bibliography  Save this paper

A Double-Hurdle Approach to Modelling Tobacco Consumption in Italy

Author

Listed:
  • David Aristei
  • Luca Pieroni

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.

Suggested Citation

  • David Aristei & Luca Pieroni, 2007. "A Double-Hurdle Approach to Modelling Tobacco Consumption in Italy," Quaderni del Dipartimento di Economia, Finanza e Statistica 29/2007, Università di Perugia, Dipartimento Economia.
  • Handle: RePEc:pia:wpaper:29/2007
    as

    Download full text from publisher

    File URL: http://www.ec.unipg.it/DEFS/uploads/quaderno29_aristei_pieroni_001.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carol Newman & Maeve Henchion & Alan Matthews, 2003. "A double-hurdle model of Irish household expenditure on prepared meals," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1053-1061.
    2. Su, Shew-Jiuan B & Yen, Steven T, 1996. "Microeconometric Models of Infrequently Purchased Goods: An Application to Household Pork Consumption," Empirical Economics, Springer, vol. 21(4), pages 513-533.
    3. 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.
    4. Mikael Bask & Maria Melkersson, 2004. "Rationally addicted to drinking and smoking?," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 373-381.
    5. G.S. Maddala & Forrest D. Nelson, 1975. "Specification Errors in Limited Dependent Variable Models," NBER Working Papers 0096, National Bureau of Economic Research, Inc.
    6. Deaton, Angus & Irish, Margaret, 1984. "Statistical models for zero expenditures in household budgets," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 59-80.
    7. Andrew M. Jones & José M. Labeaga, 2003. "Individual heterogeneity and censoring in panel data estimates of tobacco expenditure," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(2), pages 157-177.
    8. Spanos,Aris, 1999. "Probability Theory and Statistical Inference," Cambridge Books, Cambridge University Press, number 9780521424080.
    9. Chaloupka, Frank, 1991. "Rational Addictive Behavior and Cigarette Smoking," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 722-742, August.
    10. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    11. Arabmazar, Abbas & Schmidt, Peter, 1982. "An Investigation of the Robustness of the Tobit Estimator to Non-Normality," Econometrica, Econometric Society, vol. 50(4), pages 1055-1063, July.
    12. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    13. 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.
    14. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    15. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    16. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
    17. Steven T. Yen, 2005. "A Multivariate Sample-Selection Model: Estimating Cigarette and Alcohol Demands with Zero Observations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 453-466.
    18. Bera, Anil K & Jarque, Carlos M & Lee, Lung-Fei, 1984. "Testing the Normality Assumption in Limited Dependent Variable Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(3), pages 563-578, October.
    19. Curt Wells, 2003. "Retesting Fair's (1978) model on infidelity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(2), pages 237-239.
    20. Angulo, Ana Maria & Gil, Jose Maria & Gracia, Azucena, 2001. "The demand for alcoholic beverages in Spain," Agricultural Economics, Blackwell, vol. 26(1), pages 71-83, October.
    21. Steven Yen, 1999. "Gaussian versus count-data hurdle models: cigarette consumption by women in the US," Applied Economics Letters, Taylor & Francis Journals, vol. 6(2), pages 73-76.
    22. Garcia, Jaume & Labeaga, Jose M, 1996. "Alternative Approaches to Modelling Zero Expenditure: An Application to Spanish Demand for Tobacco," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 489-506, August.
    23. Federico Perali & David Aristei & Luca Pieroni, 2005. "Cohort analysis of alcohol consumption: a double hurdle approach," CHILD Working Papers wp09_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    24. Steven Yen, 2005. "Zero observations and gender differences in cigarette consumption," Applied Economics, Taylor & Francis Journals, vol. 37(16), pages 1839-1849.
    25. 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.
    26. Blundell, Richard & Meghir, Costas, 1987. "Bivariate alternatives to the Tobit model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 179-200.
    27. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
    28. Pagan, Adrian & Vella, Frank, 1989. "Diagnostic Tests for Models Based on Individual Data: A Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 29-59, Supplemen.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Aristei & Federico Perali & Luca Pieroni, 2008. "Cohort, age and time effects in alcohol consumption by Italian households: a double-hurdle approach," Empirical Economics, Springer, vol. 35(1), pages 29-61, August.
    2. David Aristei & Luca Pieroni, 2009. "Addiction, social interactions and gender differences in cigarette consumption," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 36(3), pages 245-272, August.
    3. Egemen İPEK, 2019. "An Empirical Study on Alcohol Participation and Consumption Decision in Turkey," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(41).
    4. 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.
    5. David Aristei & Luca Pieroni, 2010. "Habits, Complementarities and Heterogeneity in Alcohol and Tobacco Demand: A Multivariate Dynamic Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(4), pages 428-457, August.
    6. Federico Perali & David Aristei & Luca Pieroni, 2005. "Cohort analysis of alcohol consumption: a double hurdle approach," CHILD Working Papers wp09_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    7. Badi H. Baltagi & Ingo Geishecker, 2006. "Rational alcohol addiction: evidence from the Russian longitudinal monitoring survey," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 893-914, September.
    8. Balli Hatice Ozer & Kouhbor Mohammad Amin & Jean Louis Rosmy, 2017. "Towards Understanding Vegetables Consumption Behaviour in Iran: A Full Box-Cox Double-Hurdle Application," Review of Middle East Economics and Finance, De Gruyter, vol. 13(1), pages 1-12, April.
    9. Andrew K.G. Tan & Steven T. Yen & Rodolfo M. Nayga, Jr., 2009. "Role of Education in Cigarette Smoking: An Analysis of Malaysian Household Survey Data," Asian Economic Journal, East Asian Economic Association, vol. 23(1), pages 1-17, March.
    10. R. Brau & M. Lippi Bruni & AM. Pinna, 2004. "Public vs private demand for covering long term care expenditures," Working Paper CRENoS 200408, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    11. Eakins, John, 2016. "An application of the double hurdle model to petrol and diesel household expenditures in Ireland," Transport Policy, Elsevier, vol. 47(C), pages 84-93.
    12. Abdulbaki Bilgic & Wojciech Florkowski & Cuma Akbay, 2010. "Demand for cigarettes in Turkey: an application of count data models," Empirical Economics, Springer, vol. 39(3), pages 733-765, December.
    13. Piccoli, Luca & Tiezzi, Silvia, 2020. "Rational Addiction and Time Consistency: An Empirical Test," IZA Discussion Papers 12906, Institute of Labor Economics (IZA).
    14. Andrew M. Jones & Audrey Laporte & Nigel Rice & Eugenio Zucchelli, 2019. "Dynamic panel data estimation of an integrated Grossman and Becker–Murphy model of health and addiction," Empirical Economics, Springer, vol. 56(2), pages 703-733, February.
    15. Beltran, Jesusa C. & Pannell, David J. & Doole, Graeme J. & White, Benedict, 2011. "Factors that affect the use of herbicides in Philippine rice farming systems," Working Papers 108769, University of Western Australia, School of Agricultural and Resource Economics.
    16. Andrew Jones & Audrey Laporte & Nigel Rice & Eugenio Zucchelli, 2014. "A Synthesis of the Grossman and Becker-Murphy Models of Health and Addiction: Theoretical and Empirical Implications," Working Papers 140007, Canadian Centre for Health Economics.
    17. Jose M. Labeaga, 1993. "Individual behaviour and tobacco consumption: A panel data approach," Health Economics, John Wiley & Sons, Ltd., vol. 2(2), pages 103-112, July.
    18. repec:zbw:rwirep:0064 is not listed on IDEAS
    19. Bilgic, Abdulbaki & Florkowski, Wojciech J. & Yen, Steven T. & Akbay, Cuma, 2013. "Tobacco spending patterns and their health-related implications in Turkey," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 1-15.
    20. Harald Tauchmann & Silja Lenz & Till Requate & Christoph Schmidt, 2013. "Tobacco and alcohol: complements or substitutes?," Empirical Economics, Springer, vol. 45(1), pages 539-566, August.
    21. Göhlmann, Silja & Schmidt, Christoph M., 2008. "Smoking in Germany: Stylized Facts, Behavioral Models, and Health Policy," Ruhr Economic Papers 64, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

    More about this item

    Keywords

    tobacco consumption; double-hurdle models; limited dependent variables; Box-Cox transformation;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pia:wpaper:29/2007. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ubaldo Pizzoli). General contact details of provider: http://edirc.repec.org/data/deperit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.