Review of Tobit, Heckman and double hurdle econometric models: supported with evidences from the studies conducted in Ethiopia

Adem Kelifa ()
Additional contact information
Adem Kelifa: Gambella University

SN Business & Economics, 2023, vol. 3, issue 6, 1-14

Abstract: Abstract Econometric models are crucial element in any economic and its related data analysis to put better conclusion and forward an interesting recommendations. Therefore, model selection needs critical attention when dealing with this issue. It is tried to present the review of Tobit, Heckman two step, Heckman maximum likelihood and double hurdle econometric models in this paper. The rationale behind selection of those models is that it is difficult to strictly determine which model to use among them during development of research proposal and those models are being used in a various thematic areas currently. Therefore, this paper is supported with the review of empirical studies conducted in Ethiopia on the agricultural commercialization, particularly, market orientation and participation. The result of reviewed literatures and empirical studies shows that likelihood ratio test can be used to check for whether Tobit or double hurdle model best fit the data. Heckman two step can be used if inverse mill ratio is found significant. In the case where inverse mill ratio of Heckman two step model is not significant, Vuong test can be applied to compare Heckman maximum likelihood and double hurdle model. To sum up, based on the theoretical and empirical reviews, it is recommended to select the appropriate econometric model by performing recommended statistical tests.

Keywords: Double hurdle; Econometric model; Heckman; Tobit (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-023-00478-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:snbeco:v:3:y:2023:i:6:d:10.1007_s43546-023-00478-5

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-023-00478-5

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().