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We use sample separation information to exclude those households who never purchase tobacco. To deal with the remaining zeros we compare specifications based on infrequency of purchase and on censoring. GMM and system\u2010GMM are used to deal with errors\u2010in\u2010variables and unobservable heterogeneity. Within\u2010groups two\u2010step, within\u2010groups three\u2010step GMM and Minimum Distance methods are used to allow for censoring. There is evidence that the rational addiction specification is sensitive to unobservable heterogeneity and censoring. 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