IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v40y2007i2p201-207.html
   My bibliography  Save this article

The hurdle models choice between truncated normal and lognormal

Author

Listed:
  • Ai-Chi Hsu
  • Shu-Chin Liu

Abstract

The purpose of this article is to compare and evaluate statistical models for corner solution applications of censored regression. Generally, a double-hurdle model is better than one-part model. Cragg (1971) suggests a double-hurdle model, the truncated normal model, is widely used. However, the lognormal model is easy to have the economic interpretation than the Cragg's model. We use the simulation and empirical data to test both the models. The results show that the lognormal model is usually more robust than the truncated normal model. While the lognormal model has valuable application in censored data, its potential usefulness should not be overlooked.

Suggested Citation

  • Ai-Chi Hsu & Shu-Chin Liu, 2007. "The hurdle models choice between truncated normal and lognormal," Applied Economics, Taylor & Francis Journals, vol. 40(2), pages 201-207.
    • Handle: RePEc:taf:applec:v:40:y:2007:i:2:p:201-207
    DOI: 10.1080/00036840600749581
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840600749581
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036840600749581?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Helen H. Jensen & Steven T. Yen, 1996. "Food Expenditures Away From Home by Type of Meal," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(1), pages 67-80, March.
    2. Basile, Roberto, 2001. "Export behaviour of Italian manufacturing firms over the nineties: the role of innovation," Research Policy, Elsevier, vol. 30(8), pages 1185-1201, October.
    3. Ani L. Katchova & Mario J. Miranda, 2004. "Two-Step Econometric Estimation of Farm Characteristics Affecting Marketing Contract Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 88-102.
    4. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    5. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    6. Dong, Diansheng & Gould, Brian W., 1999. "A Double-Hurdle Model Of Food Demand With Endogenous Unit Values," 1999 Annual meeting, August 8-11, Nashville, TN 21635, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Lin, Tsai-Fen & Schmidt, Peter, 1984. "A Test of the Tobit Specification against an Alternative Suggested by Cragg," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 174-177, February.
    8. Carter Bloch, 2005. "R&D investment and internal finance: the cash flow effect," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(3), pages 213-223.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tan, Andrew K. G. & Yen, Steven T. & Hasan, Abdul Rahman & Muhamed, Kamarudin, 2014. "Household Expenditures on Vegetables in Malaysia," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-19, November.
    2. Feng Zhang & Chung L. Huang & Biing-Hwan Lin & James E. Epperson, 2008. "Modeling fresh organic produce consumption with scanner data: a generalized double hurdle model approach," Agribusiness, John Wiley & Sons, Ltd., vol. 24(4), pages 510-522.
    3. A R Gourlay & J S Seaton, 2004. "UK Export Behaviour at the Firm Level," Economic Issues Journal Articles, Economic Issues, vol. 9(2), pages 1-20, September.
    4. R. Martínez-Espiñeira, 2007. "‘Adopt a Hypothetical Pup’: A Count Data Approach to the Valuation of Wildlife," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(2), pages 335-360, June.
    5. Carol Newman & Maeve Henchion & Alan Matthews, 2003. "A double-hurdle model of Irish household expenditure on prepared meals," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1053-1061.
    6. Wobst, Peter & Tchale, Hardwick & Frohberg, Klaus, 2004. "Soil Fertility Management Choice in the Maize-Based Smallholder Farming System in Malawi," 2004 Inaugural Symposium, December 6-8, 2004, Nairobi, Kenya 9524, African Association of Agricultural Economists (AAAE).
    7. Andrew Burke & Felix FitzRoy & Michael Nolan, 2008. "What makes a die-hard entrepreneur? Beyond the ‘employee or entrepreneur’ dichotomy," Small Business Economics, Springer, vol. 31(2), pages 93-115, August.
    8. Ernest M. Zampelli & Steven T. Yen, 2017. "The Impact Of Tax Price Changes On Charitable Contributions To The Needy," Contemporary Economic Policy, Western Economic Association International, vol. 35(1), pages 113-124, January.
    9. Zhang, Feng & Huang, Chung L. & Lin, Biing-Hwan, 2006. "Modeling Fresh Organic Produce Consumption: A Generalized Double-Hurdle Model Approach," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35435, Southern Agricultural Economics Association.
    10. Deng, Xueting & Saghaian, Sayed H. & Woods, Timothy A., 2012. "A Comparison of Consumer Willingness to Pay for Four Types of Sweeteners," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119811, Southern Agricultural Economics Association.
    11. Emine Coruh & Faruk Urak & Abdulbaki Bilgic & Steven T. Yen, 2022. "The role of household demographic factors in shaping transportation spending in Turkey," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3485-3517, March.
    12. Cornelia Lawson, 2013. "Academic Inventions Outside the University: Investigating Patent Ownership in the UK," Industry and Innovation, Taylor & Francis Journals, vol. 20(5), pages 385-398, July.
    13. Langyintuo, Augustine S. & Mungoma, Catherine, 2008. "The effect of household wealth on the adoption of improved maize varieties in Zambia," Food Policy, Elsevier, vol. 33(6), pages 550-559, December.
    14. Ronelle Burger & Canh Thien Dang & Trudy Owens, 2017. "Better performing NGOs do report more accurately: Evidence from investigating Ugandan NGO financial accounts," Discussion Papers 2017-10, University of Nottingham, CREDIT.
    15. Subir K. Chakrabarti & Srikant Devaraj & Pankaj C. Patel, 2021. "Minimum wage and restaurant hygiene violations: Evidence from Seattle," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 85-99, January.
    16. Silvia Magri, 2014. "Does issuing equity help R&D activity? Evidence from unlisted Italian high-tech manufacturing firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(8), pages 825-854, November.
    17. Antony W. Dnes & Raymond Swaray, 2020. "Criminalizing price‐fixing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1417-1430, December.
    18. Richard Mussa, 2013. "Rural--urban differences in parental spending on children's primary education in Malawi," Development Southern Africa, Taylor & Francis Journals, vol. 30(6), pages 789-811, December.
    19. Steven Yen, 1995. "Alternative transformations in a class of limited dependent variable models: alcohol consumption by US women," Applied Economics Letters, Taylor & Francis Journals, vol. 2(8), pages 258-262.
    20. Aymeric Ricome & Arnaud Reynaud, 2022. "Marketing contract choices in agriculture: The role of price expectation and price risk management," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 170-186, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:40:y:2007:i:2:p:201-207. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.