Abstract

http://ssrn.com/abstract=1962123
 
 

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Econometric Models of Alcohol Demand in Danish Households


Jesper Riis-Vestergaard Sorensen


University of California, Los Angeles (UCLA) - Department of Economics

May 4, 2011


Abstract:     
Limited dependent variables are common in cross-section analysis of alcohol demand. The standard tool, the censored regression or tobit model, implies an undesirable restriction on household behaviour, which can be relaxed by using the double-hurdle model. The double-hurdle model is extended by incorporating the Box-Cox transformation, nesting a range of alternative models. Household expenditures on alcohol are analyzed with the use of Statistics Denmark’s 2005 Household Budget Survey. Estimation of budget elasticities indicates that the tobit specification leads to unreliable results. Results from the preferred Box-Cox double-hurdle are in line with the literature.

Number of Pages in PDF File: 18

JEL Classification: C30, C31, C34, D12

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Date posted: November 20, 2011  

Suggested Citation

Sorensen, Jesper Riis-Vestergaard, Econometric Models of Alcohol Demand in Danish Households (May 4, 2011). Available at SSRN: http://ssrn.com/abstract=1962123 or http://dx.doi.org/10.2139/ssrn.1962123

Contact Information

Jesper Riis-Vestergaard Sorensen (Contact Author)
University of California, Los Angeles (UCLA) - Department of Economics ( email )
8283 Bunche Hall
Los Angeles, CA 90095-1477
United States
(310)526-1728 (Phone)
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