Hidden Figures: Uncovering Quantities Behind Zeros With Econometrics

Anirban Basu

A chapter in Recent Developments in Health Econometrics, 2024, vol. 297, pp 241-253 from Emerald Group Publishing Limited

Abstract: This chapter reviews the econometric approaches typically used to deal with the spike of zeros when modelling non-negative outcomes such as expenditures, income, or consumption. Relying on the assumptions of selection on observables for evaluating a policy or treatment, this chapter discusses other issues that arise with spikes of zeros in the data, including the analyst's choice between full information versus quasi-likelihood methods, considering whether observed zeros are true or masking more complex behavioural decisions, and dealing with zeros that arise due to self-selection. This chapter ends with discussions of empirical strategies to deal with these behavioural assumptions and a brief review of the literature where such strategies were employed.

Keywords: Zeros; non-negative outcome; behavioural assumptions; self-selection; empirical strategy (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ceazzz:s0573-855520240000297012

DOI: 10.1108/S0573-855520240000297012

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