Accessibility navigation

Bayesian estimation of the double hurdle model in the presence of fixed costs

Holloway, G. ORCID:, Barrett, C. B. and Ehui, S. (2005) Bayesian estimation of the double hurdle model in the presence of fixed costs. Journal of International Agricultural Trade and Development, 1 (1). pp. 17-28. ISSN 1556-8520

Full text not archived in this repository.

It is advisable to refer to the publisher's version if you intend to cite from this work. See Guidance on citing.


We present a model of market participation in which the presence of non-negligible fixed costs leads to random censoring of the traditional double-hurdle model. Fixed costs arise when household resources must be devoted a priori to the decision to participate in the market. These costs, usually of time, are manifested in non-negligible minimum-efficient supplies and supply correspondence that requires modification of the traditional Tobit regression. The costs also complicate econometric estimation of household behavior. These complications are overcome by application of the Gibbs sampler. The algorithm thus derived provides robust estimates of the fixed-costs, double-hurdle model. The model and procedures are demonstrated in an application to milk market participation in the Ethiopian highlands.

Item Type:Article
Divisions:Life Sciences > School of Agriculture, Policy and Development > Department of Agri-Food Economics & Marketing
ID Code:30708
Publisher:Nova Publishers

University Staff: Request a correction | Centaur Editors: Update this record

Page navigation