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Evidence against Imposing Restrictions on Hurdle Models as a Test for Simultaneous versus Sequential Decision Making


  • William J Burke


Agricultural economists frequently employ hurdle models to estimate the determinants of truncated outcomes such as market participation and adoption. A pervasive belief is that restrictions can be placed on hurdle models to test whether the decisions made in the underlying data-generating process occurred sequentially or simultaneously. This article argues against the ability to draw this conclusion and further submits there is a negative correlation between failing to reject these restrictions and sample size. Evidence to support both proposals comes from data collected in a natural setting, as well as simulated data with a known data-generating mechanism.

Suggested Citation

  • William J Burke, 2019. "Evidence against Imposing Restrictions on Hurdle Models as a Test for Simultaneous versus Sequential Decision Making," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(5), pages 1473-1481.
  • Handle: RePEc:oup:ajagec:v:101:y:2019:i:5:p:1473-1481.

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