IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/48727.html
   My bibliography  Save this paper

Exploiting Zero-Inflated Consumption Data using Propensity Score Matching and the Infrequency of Purchase Model, with Application to Climate Change Policy

Author

Listed:
  • Bardsley, Nicholas
  • Buechs, Milena

Abstract

We apply propensity score matching (PSM) to the estimation of household motor fuel purchase quantities, to tackle problems caused by infrequency of purchase. The results are compared to an alternative, regression-based, imputation strategy using the infrequency of purchase model (IPM). Using data from the UK’s National Travel Survey (NTS) we observe that estimated mean obtained from the PSM imputation is closer to the estimated mean from the consumption diary, than that obtained from fitted values from the IPM. The NTS also contains an interview question on household mileage which can be used to assess the results of imputation. We find that the order statistics of the imputed distribution are more plausible for the PSM estimates than those obtained using the IPM, judging by the sample distribution of household mileage. We argue that there are some applications for which the PSM method is likely to be superior, including estimates of distributional effects of policies. On the other hand, the IPM is more suitable for analysing conditional effects and associations of consumption with covariates. We illustrate our arguments using a simple microsimulation exercise on CO2 emissions reduction policies, an area where methods for coping with zero-inflated data seem currently to be under-used.

Suggested Citation

  • Bardsley, Nicholas & Buechs, Milena, 2013. "Exploiting Zero-Inflated Consumption Data using Propensity Score Matching and the Infrequency of Purchase Model, with Application to Climate Change Policy," MPRA Paper 48727, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:48727
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/48727/1/MPRA_paper_48727.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Kimhi, Ayal, 1999. "Double-Hurdle and Purchase-Infrequency Demand Analysis: A Feasible Integrated Approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(4), pages 425-442, December.
    2. Blundell, Richard & Meghir, Costas, 1987. "Bivariate alternatives to the Tobit model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 179-200.
    3. Deaton, Angus & Irish, Margaret, 1984. "Statistical models for zero expenditures in household budgets," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 59-80.
    4. John Gibson & Bonggeun Kim, 2012. "Testing the Infrequent Purchases Model Using Direct Measurement of Hidden Consumption from Food Stocks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 257-270.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    propensity score matching; purchase infrequency; climate policy;

    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:48727. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.