Censored Demand System Estimation with Endogenous Expenditures in clustered samples: an application to food demand in urban Mozambique
AbstractWe address the issue of endogenous expenditures in the context of a censored demand system by an augmented regression approach estimated with a two-step estimator. An application to food demand by urban households in Mozambique shows that accounting for endogeneity is potentially important in obtaining reliable point estimates of price and, in particular, expenditure elasticities. Furthermore, a bootstrap approach to obtain confidence intervals when data are clustered - as is the case with most household surveys - is devised. Based on a Monte Carlo exercise we speculate that previous studies in failing to account for the clustered nature of the data overstate the precision with which elasticities are estimated.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 28011.
Date of creation: 2011
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Censored demand system; endogeneity; survey data; elasticities; Mozambique; food demand;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-04-30 (Africa)
- NEP-AGR-2011-04-30 (Agricultural Economics)
- NEP-ALL-2011-04-30 (All new papers)
- NEP-ECM-2011-04-30 (Econometrics)
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