Using Limited dependent variable models to analyze household consumption behavior (The Case of Tobacco)

Document Type : Original Article


Assistant Professor, Khorramshahr University of Marine Science and Technology


The aim of this article is to show the evolution of limited dependent variable models, giving some points on prior researches, common issues comes from demand estimation and also, modern econometric achievements in the use of zero inflated data. We used Iranian households’ consumption for tobacco in 2011 in which, most of the data for tobacco consumption are reported zero. In the other word, some households didn’t participate in tobacco consumption and were not potentially tobacco consumer or tobacco addicted. Results indicated that OLS, Tobit and Heckit estimators could not explain tobacco consumption as well as the double hurdle and is similar to many other researches which recently have done around the world. 


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