Hurdle Regression Models: An Application to Consumer Behavior in the United States

Fabrizio Carlevaro () and Yves Croissant ()
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Fabrizio Carlevaro: University of Geneva
Yves Croissant: University of Reunion

Chapter Chapter 8 in Applied Econometric Analysis Using Cross Section and Panel Data, 2023, pp 227-268 from Springer

Abstract: Abstract Hurdle regression models are regression models where the dependent variable is left censored at zero, which is typically the case in household expenditure surveys. These models are of particular interest to explain the presence of a large proportion of zero observations for the dependent variable by means of censoring mechanisms, called hurdles. For the analysis of censored household expenditure data, up to three hurdles, expressing, respectively, a good selection mechanism, a desired consumption mechanism, and a purchasing mechanism, have been suggested by the econometric literature. This chapter presents the methodology for specifying single, double, or triple hurdle regression models based on these censoring mechanisms in a fully parametric form and to estimate them using the maximum likelihood method for random samples. Model evaluation and selection are tackled by means of goodness of fit measures and Shi’s corrected Vuong tests. The practical use of this modeling methodology is illustrated with a real-world data set using an R package, especially developed for this purpose.

Keywords: Limited dependent variable; Hurdle regression; Censored regression; Consumer demand; Household expenditure survey data (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-981-99-4902-1_8

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DOI: 10.1007/978-981-99-4902-1_8

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