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A Tobit Model of Quick Service Expenditure in Ireland: Parametric vs Semiparametric Estimation

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  • Conor Keelan
  • Carol Newman
  • Maeve Henchion

    () (Trinity College Department of Economics)

Abstract

The aim of this study is to identify the economic and socio-economic factors influencing Irish households' expenditure on Food-Away-From-Home (FAFH). The main objective is to estimate a tobit model of the factors affecting Irish household expenditure on quick-service meals, a particularly dynamic component of the foodservice industry, and to determine the extent to which these factors have changed over the course of the 1990s. Maximum likelihood estimation and semiparametric alternatives are considered with the conclusion that in this instance semiparametric techniques do not offer a viable alternative to maximum likelihood estimation of tobit models even in the presence of heteroscedasticity and non-normality. Maximum likelihood estimates of an adjusted tobit model revel that household income, place of residence, commuters and household size have significant and positive influences on quick-service expenditure. Older families, single households and married couples, together with homeowners, display reduced expenditure. The opportunity cost of time is positively related to quick-service expenditure, consistent with theory, while health knowledge has a negative impact on quick-service consumption.

Suggested Citation

  • Conor Keelan & Carol Newman & Maeve Henchion, 2005. "A Tobit Model of Quick Service Expenditure in Ireland: Parametric vs Semiparametric Estimation," Trinity Economics Papers 2000517, Trinity College Dublin, Department of Economics.
  • Handle: RePEc:tcd:tcduee:2000517
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    1. Andreas C. Drichoutis & Panagiotis Lazaridis & Rodolfo M. Nayga, 2009. "Would consumers value food-away-from-home products with nutritional labels?," Agribusiness, John Wiley & Sons, Ltd., vol. 25(4), pages 550-575.

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