Tobit models: A survey

This paper examines the importance of specific relationship investments in determining the duration of coal contracts negotiated between coal suppliers and electric utilities. Data for 277 coal contracts are used to perform the analysis. The results provide strong support for the view that buyers and sellers make longer commitments to the terms of future trade at the contract execution stage, and rely less on repeated bargaining, when relationship-specific investments are more important.

https://www.jstor.org/stable/pdfplus/1806736.pdf

Contract duration and relationship-specific investments: Empirical evidence from coal markets

Publisher Summary This chapter has surveyed the current state of econometric models and methods for the analysis of qualitative dependent variables. It discusses that the models of economic optimization that are presumed to govern conventional continuous decisions are equally appropriate for the analysis of discrete response. While the intensive marginal conditions associated with many continuous decisions are not applicable, the characterization of economic agents as optimizers implies conditions at the extensive margin and substantive restrictions on functional form. Unless the tenets of the behavioral theory are themselves under test, it is good econometric practice to impose these restrictions as maintained hypotheses in the construction of discrete response models. As a formulation in terms of latent variable models makes clear, qualitative response models share many of the features of conventional econometric systems. Thus the problems and methods arising in the main stream of econometric analysis mostly transfer directly to discrete response. Divergences from the properties of the standard linear model arise from nonlinearity rather than from discreteness of the dependent variable. Thus, most developments in the analysis of nonlinear econometric systems apply to qualitative response models. In summary, methods for the analysis of qualitative dependent variables are part of the continuing development of econometric technique to match the real characteristics of economic behavior and data.

Chapter 24 Econometric analysis of qualitative response models

In this research, the authors present a modeling framework for balancing resources between customer acquisition efforts and customer retention efforts. The key question that the framework addresses is, “What is the customer profitability maximizing balance?” In addition, they answer questions about how much marketing spending to allocate to customer acquisition and retention and how to distribute those allocations across communication channels.

/pdf/balancing-acquisition-and-retention-resources-to-maximize-5bomvu5l52.pdf

Balancing Acquisition and Retention Resources to Maximize Customer Profitability

Econometric analysis of qualitative response models

The paper discusses the two-stage estimation method for switching simultaneous equations models where the criterion function determining the switching is of the probit type and the tobit type. It derives the asymptotic covariance matrices of these estimators and shows that when the criterion function is of the probit type the correct covariance matrix is underestimated when the heteroscedasticity introduced in the first step is ignored, whereas the same is not necessarily the case for one of the regimes when the criterion function is of the tobit type.

Asymptotic covariance matrices of two-stage probit and two-stage tobit methods for simultaneous equations models with selectivity

: The paper presents an extension of the Goldfeld-Quant D-method to switching simultaneous equation systems with endogenous switching. The method is useful to apply tests for equality of coefficients across regimes in switching simultaneous equation systems with selectivity. The paper derives the valid instrumental variables to use in this situation, the asymptotic covariance matrix of the suggested estimator and gives an empirical illustration. (Author)

Testing for Structural Change by D-Methods in Switching Simultaneous Equations Models.

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Asymptotic covariance matrices of two-stage probit and two-stage tobit methods for simultaneous equations models with selectivity

Testing for Structural Change by D-Methods in Switching Simultaneous Equations Models.