ESTIMATION OF CENSORED LA/AIDS MODEL WITH ENDOGENOUS UNIT VALUES

In this study, we develop and estimate a censored LA/AIDS model using household-level purchase data. In addition to imposing non-negativitity constraints, we account for the endogeneity of unit value. We address the non-negativity issue using an Amemiya-Tobin approach, which imposes the adding-up condition on both observed and latent shares. We address the endogeneity of unit value by estimating share equations and unit value equations simultaneously. Given the need to evaluate high-order probability integrals, we use a simulated probability method in the model estimation. This model is applied to estimate and analyze a demand system featuring six fish and three meat commodities, using Norwegian household data.


Issue Date:
2003-10
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/122119
Total Pages:
39
JEL Codes:
C34; D12.
Series Statement:
Research Bulletin
2003-08




 Record created 2017-04-01, last modified 2017-08-26

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