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Estimating saving functions in the presence of excessive-zeros problems

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  • Atsushi Yoshida
  • Alessandra Guariglia

Abstract

Zero-inflated Tobit models and hurdle models are developed to estimate the determinants of saving in the form of voluntary contributions to personal pension plans (PPPs) and bank deposits in Britain. These two types of saving are affected by an excessive-zeros problem. We find that, especially for saving in the form of PPP contributions, the estimates derived from both the univariate and the bivariate zero-inflated Tobit models are consistent with the hypothesis that misreporting significantly contributes to the excessive-zeros problem. However, the former model provides more realistic estimates of the determinants of the two types of saving. The univariate and bivariate hurdle models, on the other hand, give a satisfactory explanation of the positive saving, but fail to explain the zero saving. Copyright Royal Economic Society, 2002

Suggested Citation

  • Atsushi Yoshida & Alessandra Guariglia, 2002. "Estimating saving functions in the presence of excessive-zeros problems," Econometrics Journal, Royal Economic Society, vol. 5(2), pages 435-456, June.
    • Handle: RePEc:ect:emjrnl:v:5:y:2002:i:2:p:435-456
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    Cited by:

    1. Christoph Metzger, 2017. "Who is saving privately for retirement and how much? New evidence for Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(6), pages 811-831, November.
    2. Brown, Sarah & Ghosh, Pulak & Pareek, Bhuvanesh & Taylor, Karl, 2017. "Financial Hardship and Saving Behaviour: Bayesian Analysis of British Panel Data," IZA Discussion Papers 10910, Institute of Labor Economics (IZA).
    3. Thomas de Graaff & Piet Rietveld, 2004. "ICT and Substitution Between Out-of-Home and at-Home Work: The Importance of Timing," Environment and Planning A, , vol. 36(5), pages 879-896, May.
    4. Alessandra Guariglia & Byung‐Yeon Kim, 2003. "Wage arrears uncertainty and precautionary saving in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 493-512, September.
    5. Brown, Sarah & Ghosh, Pulak & Pareek, Bhuvanesh & Taylor, Karl, 2021. "The protective role of saving: Bayesian analysis of British panel data," Journal of Empirical Finance, Elsevier, vol. 63(C), pages 57-72.

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