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A Sample Selection Approach To Censored Demand Systems

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  • Yen, Steven T.
  • Lin, Biing-Hwan

Abstract

A censored demand system estimator is proposed by extending the sample selection model of Heckman. Censoring is governed by a selection mechanism which avoids the restricitve Tobit parameterization. Results of application to household consumption of beverages suggest the estimator produces slightly different elasticity estimates from the Tobit estimator. Demands for beverages are nearly unitary elastic, and net substitution is an obvious pattern.

Suggested Citation

  • Yen, Steven T. & Lin, Biing-Hwan, 2004. "A Sample Selection Approach To Censored Demand Systems," 2004 Annual meeting, August 1-4, Denver, CO 20082, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20082
    DOI: 10.22004/ag.econ.20082
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    References listed on IDEAS

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    5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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