A Binary-Ordered Probit Model of Cigarette Demand

This study analyzes the demand for cigarettes fitting observed zero outcomes with a trivariate model consisting of an equation for the starting smoking decision, an equation for the quitting decision, and an equation that models the level of cigarettes consumed. Five competing specifications are considered to explain level, with the ordered probit, which accommodates pile-ups of counts in the dependent variable, providing the best fit. Marginal effects of explanatory variables are calculated providing strong evidence of race and gender differences in consumption patterns. The estimated marginal effects are robust to alternative categorizations of the level of cigarettes.


Issue Date:
2007
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/9862
Total Pages:
30
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-23

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