Zero observations and gender differences in cigarette consumption
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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Document Type: Research Article
Affiliations: Department of Agricultural Economics, The University of Tennessee, 302 Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996-4518, USA, Email: [email protected]
Publication date: 10 September 2005