Compositional data analysis and zeros in micro data
AbstractThe application of compositional data analysis methods in economics has some attraction. The methodology relies upon the use of 'log-ratios' in the statistical analysis. Such an approach is not possible when the data to be analysed include observations where the observed budget share is zero. We, therefore, consider and extend the methods of compositional data analysis in the situation where the data to be analysed include observations where the observed budget share is zero. The modified compositional data methods are discussed both in statistical terms and through potential economic interpretations of the method. Further, the modified methodology is applied to the 1988-89 Australian Household Expenditure Survey yielding estimates for a system of Engel curves.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 32 (2000)
Issue (Month): 8 ()
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Other versions of this item:
- Jane M. Fry & Tim R.L. Fry & Keith R. McLaren, 1996. "Compositional Data Analysis and Zeros in Micro Data," Centre of Policy Studies/IMPACT Centre Working Papers g-120, Monash University, Centre of Policy Studies/IMPACT Centre.
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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