In this paper we model expenditure on housing for owners and renters by means of endogenous switching regression models using cross-section data. We explain the share of housing in total expenditure from family characteristics and total expenditure, where the latter is allowed to be endogenous. We apply various existing parametric and semiparametric techniques for cross-section data. Exogeneity of total expenditure is rejected for the parametric models but not for most semiparametric models. The results are compared on the basis of graphs of the estimated relationship between the budget share spent on housing and the logarithm of total expenditure and on the baisi of budget elasticities.
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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number
15.
Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand
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