Double-hurdle Model with Bivariate Normal Errors: An Application to U.S. Rice Demand

X.M. Gao, Eric J. Wailes and Gail Cramer

Journal of Agricultural and Applied Economics, 1995, vol. 27, issue 2, 363-376

Abstract: Per capita rice consumption in the U.S. has doubled over the past decade. The effects of social and demographic variables on the household's rice consumption decisions are analyzed along with income and price variables. A double-hurdle model is used to solve simultaneously the consumer decisions whether to purchase rice and how much. The joint decision hypothesis is tested and accepted. The non-normal distribution of error terms may be responsible for possible bias in the empirical test of the joint decision hypothesis. The hyperbolic sine transformation is used to correct the problem in this study prior to testing the joint decision hypothesis.

Date: 1995
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Journal Article: DOUBLE-HURDLE MODEL WITH BIVARIATE NORMAL ERRORS: AN APPLICATION TO U.S. RICE DEMAND (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jagaec:v:27:y:1995:i:02:p:363-376_02

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