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Estimation of a Censored AIDS Model: A Simulated Amemiya-Tobin Approach AgEcon
Dong, Diansheng; Kaiser, Harry M..
Kuhn-Tucker approach and its dual have been proposed to the demand system estimation when there are non-negativity bindings. However, empirical researchers have been struggling two decades in applying this method into practice due to: (1) the difficulty in derivation of a coherent econometric model, and (2) the cumbersome evaluation of high order probability integrals needed in parameter estimation. In this paper, we avoid the above two issues by using the Amemiya-Tobin demand system approach and the simulation procedure to evaluate the probability integrals. An AIDS model is estimated and the elasticities are obtained that are impossible to achieve when using Kuhn-Tucker approach. The model is applied to an analysis of Canadian household food demand.
Tipo: Technical Report Palavras-chave: Amemiya-Tobin; Censored demand system; AIDS model; Probability simulation; Canadian household food demand; Demand and Price Analysis; Research Methods/ Statistical Methods; C34; D12.
Ano: 2003 URL: http://purl.umn.edu/122113
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Modeling the Household Purchasing Process Using a Panel Data Tobit Model AgEcon
Dong, Diansheng; Schmit, Todd M.; Kaiser, Harry M..
A panel data Tobit model is developed to examine the household purchase process for a frequently purchased commodity. The proposed model accounts not only for censoring or sample selectivity, but also the temporal dependence of the purchasing process using household panel data. The flexible error structure in the model accounts for both state dependence and household heterogeneity. Empirical findings show that purchase habits of milk persist across households over time, and most of them come from the household heterogeneity in preferences. Results also show that advertising increases the purchase quantity and purchase frequency simultaneously.
Tipo: Technical Report Palavras-chave: Household purchase; Fluid milk; Advertising; Panel data; Tobit model; Probability simulation; Food Consumption/Nutrition/Food Safety.
Ano: 2003 URL: http://purl.umn.edu/122115
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