Modelling zeroes in microdata
AbstractAlthough the literature contains a number of suggestions for dealing with problems caused by a preponderance of zero expenditure observations that frequently occur in micro level budget studies, in general, these suggestions seem to be either empirically intractable or theoretically unappealing. In this paper it is argued that a natural theoretical specification can be motivated by duality theory and that the statistical technique of compositional data analysis provides a corresponding complementary stochastic specification. The resulting model is a consistent theoretical and stochastic specification for handling the possibility of a zero demand over a range of expenditures and/or prices. The model is then applied to the 1988/89 Australian Household Expenditure Survey.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 33 (2001)
Issue (Month): 3 ()
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- Bente Halvorsen & Runa Nesbakken, 2004. "Accounting for differences in choice opportunities in analyses of energy expenditure," Discussion Papers 400, Research Department of Statistics Norway.
- Terence Mills, 2010. "Forecasting compositional time series," Quality & Quantity: International Journal of Methodology, Springer, vol. 44(4), pages 673-690, June.
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