A box-cox double-hurdle model

Listed in:

• Adults' demand for tobacco products
• Impact of tax on tobacco use
• Theoretical frameworks
• Analysis of survey data
• Tax, price and tobacco use: Adults

Abstract

The double‐hurdle model with dependence is extended by incorporating the Box–Cox transformation. The model nests a range of popular limited dependent variable models, including the Gaussian double‐hurdle, the generalized Tobit, and two‐part models. Estimates of US beef consumption suggest that the Box–Cox specification outperforms all other restrictive models. Price elasticities are small and similar to findings in the literature. Household age composition and demographic variables also play significant roles in determining beef consumption. Income and cross‐price elasticities are insignificant.