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Hurdle Models of Alcohol and Tobacco Expenditure in South African Households

Marc Ground () and Steven Koch ()
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Marc Ground: Department of Economics, University of Pretoria

No 200703, Working Papers from University of Pretoria, Department of Economics

Abstract: Estimates of participation or expenditure elasticities depend upon the assumptions made regarding the observation of zero expenditure at the household level. This research examines two single-hurdle models across two commodities for which nearly two-thirds of the observations are zero. The research shows that one hurdle model consistently outperforms the other, and does so for intuitively appealing reasons.

JEL-codes: C31 D12 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2007-02
New Economics Papers: this item is included in nep-afr, nep-dev and nep-hea
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