Estimating Saving Functions in the Presence of Excessive-Zeros Problems

22 Pages Posted: 5 Feb 2003

See all articles by Atsushi Yoshida

Atsushi Yoshida

University of Tsukuba - Institute of Policy and Planning Sciences

Alessandra Guariglia

University of Kent, Canterbury

Abstract

Zero-inflated Tobit models and hurdle models are developed to estimate the determinants of saving in the form of voluntary contributions to personal pension plans (PPPs) and bank deposits in Britain. These two types of saving are affected by an excessive-zeros problem. We find that, especially for saving in the form of PPP contributions, the estimates derived from both the univariate and the bivariate zero-inflated Tobit models are consistent with the hypothesis that misreporting significantly contributes to the excessive-zeros problem. However, the former model provides more realistic estimates of the determinants of the two types of saving. The univariate and bivariate hurdle models, on the other hand, give a satisfactory explanation of the positive saving, but fail to explain the zero saving.

Suggested Citation

Yoshida, Atsushi and Guariglia, Alessandra, Estimating Saving Functions in the Presence of Excessive-Zeros Problems. Available at SSRN: https://ssrn.com/abstract=369157

Atsushi Yoshida (Contact Author)

University of Tsukuba - Institute of Policy and Planning Sciences ( email )

Tennodai 1-1-1, Tsukuba
Japan

Alessandra Guariglia

University of Kent, Canterbury ( email )

Canterbury, Kent CT2 7NZ
United Kingdom
01227 827412 (Phone)
01227 827850 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
21
Abstract Views
668
PlumX Metrics