Cornell University
Library
Cornell UniversityLibrary

eCommons

Help
Log In(current)
  1. Home
  2. Cornell SC Johnson College of Business
  3. Charles H. Dyson School of Applied Economics and Management
  4. Applied Economics Research
  5. Dyson School Working Papers
  6. Bayes' Estimates of the Double Hurdle Model in the Presence of Fixed Costs

Bayes' Estimates of the Double Hurdle Model in the Presence of Fixed Costs

File(s)
Cornell_Dyson_wp0242.pdf (367.21 KB)
Permanent Link(s)
https://hdl.handle.net/1813/58062
Collections
Dyson School Working Papers
Author
Holloway, Garth J.
Barrett, Christopher B.
Ehui, Simeon K.
Abstract

We present a model of market adoption (participation) where the presence of non-negligible fixed costs leads to non-zero censoring of the traditional double-hurdle regression. Fixed costs arise due to household resources that must be devoted a priori to the decision to participate in the market. These costs-usually a cost of time-motivate two-step decision-making and focus attentions on the minimum-efficient scale of operations (the minimum amount of milk sales) at which market entry becomes viable. This focus, in turn, motivates a non-zero-censored Tobit regression estimated through routine application of Markov chain Monte Carlo Methods.

Description
WP 2002-42 December 2002
Date Issued
2002-12
Publisher
Charles H. Dyson School of Applied Economics and Management, Cornell University
Keywords
market participation
•
fixed costs
•
double-hurdle model
•
censored regression
Type
article

Site Statistics | Help

About eCommons | Policies | Terms of use | Contact Us

copyright © 2002-2026 Cornell University Library | Privacy | Web Accessibility Assistance