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Estimation Of Censored La/Aids Model With Endogenous Unit Values

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  • Dong, Diansheng
  • Kaiser, Harry M.
  • Myrland, Oystein

Abstract

In this study, we develop and estimate a censored LA/AIDS model using household-level purchase data. In addition to imposing non-negativitity constraints, we account for the endogeneity of unit value. We address the non-negativity issue using an Amemiya-Tobin approach, which imposes the adding-up condition on both observed and latent shares. We address the endogeneity of unit value by estimating share equations and unit value equations simultaneously. Given the need to evaluate high-order probability integrals, we use a simulated probability method in the model estimation. This model is applied to estimate and analyze a demand system featuring six fish and three meat commodities, using Norwegian household data.

Suggested Citation

  • Dong, Diansheng & Kaiser, Harry M. & Myrland, Oystein, 2003. "Estimation Of Censored La/Aids Model With Endogenous Unit Values," Research Bulletins 122119, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudarb:122119
    DOI: 10.22004/ag.econ.122119
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    References listed on IDEAS

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    Cited by:

    1. Thanagopal, Dr. Thannaletchimy & Housset, Félix, 2017. "A quality-adjusted AIDS model in the study of French imports," International Economics, Elsevier, vol. 151(C), pages 85-99.

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