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Hidden Figures: Uncovering Quantities Behind Zeros With Econometrics

In: Recent Developments in Health Econometrics

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  • Anirban Basu

Abstract

This chapter reviews the econometric approaches typically used to deal with the spike of zeros when modelling non-negative outcomes such as expenditures, income, or consumption. Relying on the assumptions of selection on observables for evaluating a policy or treatment, this chapter discusses other issues that arise with spikes of zeros in the data, including the analyst's choice between full information versus quasi-likelihood methods, considering whether observed zeros are true or masking more complex behavioural decisions, and dealing with zeros that arise due to self-selection. This chapter ends with discussions of empirical strategies to deal with these behavioural assumptions and a brief review of the literature where such strategies were employed.

Suggested Citation

  • Anirban Basu, 2024. "Hidden Figures: Uncovering Quantities Behind Zeros With Econometrics," Contributions to Economic Analysis, in: Recent Developments in Health Econometrics, volume 127, pages 241-253, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:ceazzz:s0573-855520240000297012
    DOI: 10.1108/S0573-855520240000297012
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