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Tobit at Fifty: A Brief History of Tobin's Remarkable Estimator, of Related Empirical Methods, and of Limited Dependent Variable Econometrics in Health Economics

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Author Info
Kohei Enami
John Mullahy
Abstract

Practitioners of empirical health economics might be forgiven for paying little heed to the recent 50th anniversary of the publication of one of the most important papers in its methodological heritage: James Tobin's widely-cited 1958 Econometrica paper that developed what later became known as the Tobit estimator. This golden anniversary milestone provides a fitting opportunity to reflect on Tobin's contribution and to assess the role that econometric limited dependent variable modeling has played in empirical health economics. Of primary focus here is how Tobin's estimator came to be and came to take root in empirical health economics. The paper provides a brief history of Tobin's estimator and related methods up through about 1971, discusses the early applications of Tobit and related estimators in health economics, i.e. the "technology diffusion" of Tobit in health economics, and offers some concluding remarks.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14512.

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Date of creation: Nov 2008
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Handle: RePEc:nbr:nberwo:14512

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I1 - Health, Education, and Welfare - - Health

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    Other versions:
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  6. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 120-137 National Bureau of Economic Research, Inc. [Downloadable!]
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  14. Shiller, Robert J., 1999. "The Et Interview: Professor James Tobin," Econometric Theory, Cambridge University Press, vol. 15(06), pages 867-900, December. [Downloadable!]
  15. Olsen, Randall J, 1978. "Note on the Uniqueness of the Maximum Likelihood Estimator for the Tobit Model," Econometrica, Econometric Society, vol. 46(5), pages 1211-15, September. [Downloadable!] (restricted)
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  20. Powell, James L., 1984. "Least absolute deviations estimation for the censored regression model," Journal of Econometrics, Elsevier, vol. 25(3), pages 303-325, July. [Downloadable!] (restricted)
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