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The Probability That a Smoker Does Not Purchase Tobacco: A Note

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  • Daniel Miles

Abstract

In this note we are concerned with the estimation of the probability that a smoker does not purchase tobacco during a survey. Usually, tobacco demand has been estimated using limited dependent variable models under the assumption that an important proportion of smokers declared a zero expenditure in tobacco. However, if the probability of non purchasing by a smoker is negligible, zeros could be ignored and the demand equation could be estimated on positive expenditure data using traditional estimation methods. Here we estimate this probability and find that it is extremely small. A novelty of this work is the use of data on the quantity and frequency of tobacco purchases during the week of the survey, instead of the more commonly used expenditure data.

Suggested Citation

  • Daniel Miles, 2000. "The Probability That a Smoker Does Not Purchase Tobacco: A Note," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(5), pages 647-656, December.
    • Handle: RePEc:bla:obuest:v:62:y:2000:i:5:p:647-656
    DOI: 10.1111/1468-0084.00195
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    Cited by:

    1. 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.
    2. Knut R. Wangen & Erik Biørn, 2001. "Prevalence and substitution effects in tobacco consumption: A discrete choice analysis of panel data," Discussion Papers 312, Statistics Norway, Research Department.
    3. Jaume García-Villar & Ángel López-Nicolás, 2015. "Who is afraid of smoking bans? An evaluation of the effects of the Spanish clean air law on expenditure at hospitality venues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(8), pages 813-834, November.

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