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European Review of Agriculture Economics Vol 26 (4) (1999) pp.425-442
© 1999 Oxford University Press and the Foundation for the European Review of Agricultural Economics

Double-hurdle and purchase-infrequency demand analysis: a feasible integrated approach

A Kimhi

The Hebrew University, Rehovot, Israel

Summary

This paper proposes an integrated model that incorporates, as special cases, the double-hurdle and the purchase-infrequency models, both previously used to account for zero observations in commodity demand analyses. Monte-Carlo simulations show that the integrated model is more robust to misspecification of the censoring rule than any of the two simpler models. The integrated model is then applied to the demand for tobacco products in Israel. The purchase-infrequency results were closer to those of the integrated model than the results of the double-hurdle model.

Keywords: demand, zero observations, integrated model


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