Handling excess zeros in count models for recreation demand analysis without apology

Adan Martinez-Cruz ()
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Adan Martinez-Cruz: ETH Zurich, Switzerland

No 16/253, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: Hurdle and zero-inflated models are the two foremost methods used to deal with excess zeros. However, their reliance on the non-participation assumption is a drawback when applied to recreation demand analysis because there is not a theoretical framework convincingly explaining the presence of non-participants. This paper discusses how latent class count models represent a theoretically consistent alternative to handle excess zeros. The theoretical model behind a latent class model does not require the non-participation assumption. Instead, excess zeros are explained as the accumulation of corner solutions from individuals belonging to different classes.

Keywords: Excess zeros; Latent class count models; Travel Cost Method (search for similar items in EconPapers)
JEL-codes: C29 Q26 Q51 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2016-07
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