Overview

Data collected by means of households’ expenditure survey may present a large proportion of zero expenditures due to many households recording, for one reason or another, no expenditure for some items. Since the seminal paper of Tobin (1958), a large econometric literature has been developed to deal correctly with this problem of zero observations. In particular, a good selection mechanism was introduced by Cragg (1971) and a purchasing mechanism by Deaton and Irish (1984). We propose an encompassing approach with a general three equations model for which a zero expense can be observed either because:

mhurdle provides a set of tools to estimate (by maximum likelihood) and test (using especially vuong test) this generalized hurdle model.

Installation

mhurdle is on CRAN.

install.packages("mhurdle")

For the development version, use

install.packages("devtools")
devtools::install_github("ycroissant/mhurdle")