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CONSISTENT ESTIMATION OF LONGITUDINAL CENSORED DEMAND SYSTEMS

Chad Meyerhoefer, Christine K. Ranney and David Sahn ()

No 19992, 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: In this paper we derive a joint continuous/censored demand system suitable for the analysis of commodity demand relationships using panel data. Unobserved heterogeneity is controlled for using a correlated random effects specification and a Generalized Method of Moments framework used to estimate the model in two stages. While relatively small differences in elasticity estimates are found between a flexible specification and one that restricts the relationship between the random effect and budget shares to be time invariant, larger differences are observed between the most flexible random effects model and a pooled cross sectional estimator. The results suggest the limited ability of such estimators to control for preference heterogeneity and unit value endogeneity leads to parameter bias.

Keywords: Research; Methods/; Statistical; Methods (search for similar items in EconPapers)
Pages: 26
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea04:19992

DOI: 10.22004/ag.econ.19992

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