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The Analysis of Models with Qualitative or Censored Dependent Variables

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Advanced Econometric Methods

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Abstract

Traditionally economists have dealt with models designed to explain the variation in a dependent variable which could be assumed continuous and normally distributed. Economics, however, as a theory of choice, can be applied not only to questions about how much to produce or consume but also“whether” to produce or consume a certain item. More generally, individual economic units often must choose between a finite set of alternatives. Economists are interested in what factors are considered by the decision making unit and in quantifying their individual effects. Some examples of situations where such choices arise are:

  1. (i)

    a household must decide whether to buy or rent a suitable dwelling;

  2. (ii)

    a Senator must decide on whether to vote yes or no on a particular piece of legislation;

  3. (iii)

    a consumer must choose which of perhaps several shopping areas to visit and a mode of transportation;

  4. (iv)

    members of a household must decide whether to take part-time or fulltime employment, or whether or not to seek a second job; and

  5. (v)

    a person must decide whether or not to attend college.

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Author information

Authors and Affiliations

  1. Department of Economics, Southern Methodist University, Dallas, TX, 75275, USA

    Thomas B. Fomby

  2. The Center for Agricultural and Rural Development, Iowa State University, Ames, IA, 50011, USA

    Stanley R. Johnson (Director)

  3. Department of Economics, Louisiana State University, Baton Rouge, LA, 70803, USA

    R. Carter Hill

Authors
  1. Thomas B. Fomby
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  2. Stanley R. Johnson
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  3. R. Carter Hill
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© 1984 Springer Science+Business Media New York

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Fomby, T.B., Johnson, S.R., Hill, R.C. (1984). The Analysis of Models with Qualitative or Censored Dependent Variables. In: Advanced Econometric Methods. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-8746-4_16

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  • DOI: https://doi.org/10.1007/978-1-4419-8746-4_16

  • Publisher Name: Springer, New York, NY

  • Print ISBN: 978-0-387-96868-1

  • Online ISBN: 978-1-4419-8746-4

  • eBook Packages: Springer Book Archive

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