| 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. |
