/* Data generating process: weekly demand for cigarettes	 age 20-50	*/
/* Age (between 20-50)		age~U(20,50)					*/
/* Weekly net income		ln(income)~N(6,0.3)		 		*/
/* Error term			u ~ N(0,5)					*/			*/
/* Desired demand (latent)	cigarettes_star = -130+0.3*income+age+u		*/
/* Observed demand			cigarettes=max(ystar,0)				*/

clear
set obs 100 
set seed 10101
gen age=20+30*runiform()
gen income=exp(rnormal(6,0.3))
gen u=rnormal(0,5)
gen cigarettes_star=-130+0.3*income+1*age+u
gen cigarettes=max(cigarettes_star,0)