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Demand Systems Estimation with Microdata: A Censored Regression Approach

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  • Heien, Dale
  • Wessells, Cathy Roheim

Abstract

Demand systems estimation increasingly makes use of household-level microdata, mainly to measure the effects of demographic variables. Data based on these household-expenditure surveys present a major estimation problem. For any given houshold, many of the goods have zero consumption, implying a censored dependent variable. Techniques which do not take this censored dependent variable into account will yield biased results. We utilize a censored regression approach that is computationally simple, consistent, and asymptotically efficient. The results are then presented and compared with those obtained using an uncensored technique.

Suggested Citation

  • Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-371, July.
    • Handle: RePEc:bes:jnlbes:v:8:y:1990:i:3:p:365-71
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