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Hurdle Models of Alcohol and Tobacco Expenditure in South African Households

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Author Info
Marc Ground () (Department of Economics, University of Pretoria)
Steven F. Koch () (Department of Economics, University of Pretoria)

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Abstract

Estimates of participation or expenditure elasticities depend upon the assumptions made regarding the observation of zero expenditure at the household level. This research examines two single-hurdle models across two commodities for which nearly two-thirds of the observations are zero. The research shows that one hurdle model consistently outperforms the other, and does so for intuitively appealing reasons.

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Publisher Info
Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 200703.

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Length: 25 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:pre:wpaper:200703

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Find related papers by JEL classification:
C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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  1. Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics. [Downloadable!]
  2. Olufunke A. Alaba & Steven F. Koch, 2008. "Health Insurance or Food for the Family? An Examination into Unintended Consequences," Working Papers 200824, University of Pretoria, Department of Economics. [Downloadable!]
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