The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Tobit Model

  • Jean-Marc Robin
Reference work entry


Tobit models are used to model variables subject to exogenous censoring. For example, duration data cannot be observed longer than the survey period; hours of work cannot be observed negative although an individual might be better off consuming more leisure time than is available. This article reviews a list of econometric techniques to estimate Tobit models. Maximum likelihood, Heckman’s two-stage estimator, and Powell’s trimmed least squares are successively addressed.


Censored regression model Endogenous regressors Heteroskedasticity Labour supply Maximum likelihood Non-normal errors Ordinary least squares Probit model Tobit model Trimmed least squares Two-stage estimation 

JEL Classifications

C25 C24 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jean-Marc Robin
    • 1
  1. 1.