Showing papers on "Tobit model published in 2015"

A Triple-Hurdle Model of Production and Market Participation in Kenya's Dairy Market

Abstract: Existing analyses of market participation are based on a “double‐hurdle” modeling approach. Such models are appropriate only when all members of the population of interest actually produce the good. In some contexts, however (e.g., smallholder farmers), many members of the population do not produce particular goods that they could produce and that their neighbors do produce. Policies influencing market participation among producers may thus also induce additional farmers to become producers. Previous double‐hurdle approaches do not allow explicitly for this possibility. To address these limitations, this article presents a “triple‐hurdle” approach with an initial stage that includes nonproducers. The model is used to identify the factors associated with Kenyan smallholder farmers choosing to participate in dairy production, and the role that these producers choose to play (or not) in the marketplace. In the midst of debates underway over the privatization of the parastatal Kenya Creameries Company, new knowledge about smallholder participation in dairy could be an important contribution. Results suggest the importance of rural electrification, training, and improved grazing practices. We find that expected net sales are significantly higher when farmers have access to informal private markets. We also describe a version of the ordered tobit model that includes nonproducers and is nested in our triple‐hurdle model. A likelihood ratio test shows the latter to be a significantly better fit to our data. We discuss how insights gained from this study differ from the insights that would come from a double‐hurdle ordered tobit that also includes nonproducers.

Factors affecting public transportation usage rate: Geographically weighted regression

Abstract: As the number of private vehicles grows worldwide, so does air pollution and traffic congestion, which typically constrain economic development. To achieve transportation sustainability and continued economic development, the dependency on private vehicles must be decreased by increasing public transportation usage. However, without knowing the key factors that affect public transportation usage, developing strategies that effectively improve public transportation usage is impossible. Therefore, this study respectively applies global and local regression models to identify the key factors of usage rates for 348 regions (township or districts) in Taiwan. The global regression model, the Tobit regression model (TRM), is used to estimate one set of parameters that are associated with explanatory variables and explain regional differences in usage rates, while the local regression model, geographically weighted regression (GWR), estimates parameters differently depending on spatial correlations among neighbouring regions. By referencing related studies, 32 potential explanatory variables in four categories, social-economic, land use, public transportation, and private transportation, are chosen. Model performance is compared in terms of mean absolute percentage error (MAPE) and spatial autocorrelation coefficient (Moran’ I). Estimation results show that the GWR model has better prediction accuracy and better accommodation of spatial autocorrelation. Seven variables are significantly tested, and most have parameters that differ across regions in Taiwan. Based on these findings, strategies are proposed that improve public transportation usage.

Wind Insurance and Mitigation in the Coastal Zone

Abstract: This paper presents the only study analyzing the decision to purchase wind coverage for individuals whose standard homeowner’s policy excludes wind, and one of very few analyses of the decision to undertake wind mitigation measures. Because these two decisions are closely related, a simultaneous mixed-process approach is used that allows for correlated disturbances across probit (insurance) and tobit (mitigation) equations. Results indicate a positive correlation between errors of the insurance and mitigation models; conditioning on covariates, households that hold wind insurance tend to engage in greater levels of wind mitigation.

Chinese regional energy efficiency change and its determinants analysis: Malmquist index and Tobit model

Abstract: China becomes the largest energy consumer in 2010 but its energy productivity is well below the world average. To meet China’s fast growing energy using, energy efficiency should be especially emphasized under China’s energy policy. This paper focuses on the regional level of energy efficiency change in China. And we analyze total factor energy efficiency for 30 Chinese provinces over the period 1998–2009 using Malmquist index method and Tobit analysis. The Malmquist estimation results suggest there is a dropping change trend of energy productivity growth. Chinese energy efficiency still faces with huge regional disparity, but the energy technical efficiency reflects convergence in the nationwide and west region. As a result of Tobit regression, we find that industrial structure, energy consumption structure and institutional factor have different influences on energy efficiency.

Technical, allocative, and economic efficiency among smallholder maize farmers in Southwestern Ethiopia: Parametric approach

Abstract: Maize is one of the major five staple cereal crops in Ethiopia. High productivity and efficacy in its production is critical to improve food security, reduce the level of poverty and achieve or maintain agricultural growth. A multi-stage sampling technique was used to select 385 household heads and interviewed using a structured questionnaire during 2013/2014 production year. The study estimates, technical, allocative and economic efficiency using a parametric stochastic frontier production function (Cobb-Douglas). Inefficiency effects are modeled in a second stage applying a two-limit Tobit regression model. The results show that the mean technical, allocative and economic efficiency score was found to be 62.3, 57.1 and 39%, respectively, indicating a substantial level of inefficiency in maize production. The result depicted that important factors that affected technical, allocative and economic efficiency are a number of family size, level of education, extension service, cooperative membership, farm size, livestock holding and use of mobile. Based on the findings the following recommendations are forwarded. The government should motivate and mobilize the youth in agricultural activities, invest in the provision of basic education and facilitate the necessary materials, strengthen the existing agricultural extension system, organize non-member farmers in cooperative association and due attention should be given to enhance the efficiency of farmers with large land holding size. Further, government and stakeholders should promote the expansion of mobile networking in the study area. Key words: Efficiencies, parametric stochastic approach, two-limit Tobit model, Ethiopia.

Modeling Crash Rates for a Mountainous Highway by Using Refined-Scale Panel Data

Abstract: Traditional traffic safety analyses on crash frequency or crash rate usually focus on highly aggregated cross-sectional data. The adoption of aggregated data ignores the time-varying nature of some critical factors, and their effects on traffic safety may be masked through data aggregation. For mountainous highways, weather- and environment-related variables become critical as a result of complex time- and spatial-varying characteristics as well as interactions with mountainous terrain. Therefore, refined-scale models are often desired to appropriately model crash safety risks on mountainous highways and disclose the inherent crash mechanism. An advanced random parameter Tobit model with panel data (time series cross-sectional data) in refined temporal scale was developed. This is so far the first reported effort on integrating random parameter Tobit model and refined-scale panel data to develop crash rate models. A random parameter model was adopted not only to handle unobserved heterogeneity explicitly, but also to account for serial correlations across observations in panel data. Refined-scale weather and traffic data in a panel formation were adopted to accommodate the varying nature of complex driving conditions. Interstate 70 (I-70) in Colorado is well known for its typical mountainous terrain, critical role for local and national traffic, and inclement weather. As a demonstration of the modeling techniques, crash rates for a segment of I-70 were investigated in refined temporal scale. RESULTS showed that a random parameter Tobit model outperformed a fixed-parameter Tobit model, and factors related to traffic, weather, and surface conditions were found to play significant roles in an accident rate model.

R & D spending among Chinese SMEs: the role of business owners’ characteristics

Abstract: Purpose – Given that organizational decisions are made by individuals and thus shaped by their subjective and objective characteristics, the purpose of this paper is to examine the effect of SME business owners’ characteristics on their firms’ research and development (R & D) spending in a transition economy. Design/methodology/approach – The authors first build the arguments that, among small- and medium-sized enterprises (SMEs), business owners’ perceived importance of R & D-related activities, their education, related experiences, and social connections, should affect their firms’ R & D spending positively. Then the authors use a Chinese nationwide survey of private SMEs to test the arguments. Tobit regression analyses are conducted by taking Stata 12.0 as the statistic tool. Findings – The authors find that business owners’ perceived importance of R & D-related activities is positively associated with their firms’ R & D spending. In addition, better-educated owners and owners who have technology-relat...

Comparing technical efficiency of organic and conventional coffee farms in rural hill region of Nepal using data envelopment analysis (DEA) approach

Abstract: The data envelopment analysis (DEA) approach was used to estimate technical efficiency scores which were then regressed against farm specific characters using Tobit regression. Primary data were collected from a random sample of 240 organic and conventional coffee famers (120 from each type). Mean technical efficiency scores were 0.89 and 0.83 for organic and conventional coffee farming, respectively. Scores for farms operating under constant return to scale (CRS), decreasing return to scale (DRS) and increasing return to scale (IRS) were 31.67, 3.83, and 37.5 %, respectively, for organic coffee and 29.17, 25, and 45.83 %, respectively, in conventional farming areas. These scale characteristics define a production set that is closed and convex with property of strong disposability. Tobit regression showed that the variation in technical efficiency was related to education, farm experience and training/extension services, and access to credit. Farmers would reconsider the rationing of input and learn from technically efficient farm practices. Policy implications will rest on production planning strategies. The objective of this study was to estimate the technical efficiency of both types of farming and evaluating the factors affecting farm inefficiency of each farming category of coffee in rural region of Nepal.

Bayesian Tobit quantile regression with single-index models

Abstract: Based on the Bayesian framework of utilizing a Gaussian prior for the univariate nonparametric link function and an asymmetric Laplace distribution (ALD) for the residuals, we develop a Bayesian treatment for the Tobit quantile single-index regression model (TQSIM). With the location-scale mixture representation of the ALD, the posterior inferences of the latent variables and other parameters are achieved via the Markov Chain Monte Carlo computation method. TQSIM broadens the scope of applicability of the Tobit models by accommodating nonlinearity in the data. The proposed method is illustrated by two simulation examples and a labour supply dataset.

Household composition, income, and food-away-from-home expenditure in urban China

Abstract: This paper examines the impact of Ontario’s Greenbelt legislation, a land use policy that permanently protects over 1.8 million acres of land from non-agricultural development, on farmers’ exit and investment decisions. A farm-level panel data set for 32,512 farms in Ontario is used to perform two econometric estimations: a correlated random effects Probit model of farm exit and a dynamic unobserved effects Tobit model of farm investment. The Greenbelt policy is found to have influenced both farm exit and farm investment decisions, with the impact varying depending on location within the Greenbelt. In particular, the results indicate evidence of a negative impact on farm investment, which is contrary to one of the objectives of the Greenbelt policy.

Finance and Inclusive Human Development: Evidence from Africa

Abstract: This study investigates direct and indirect linkages between financial development and inclusive human development in data panels for African countries using a battery of estimation techniques, notably: Two-Stage Least Squares, Fixed Effects, Generalized Method of Moments and Tobit regressions. The dependent variable is the inequality adjusted human development index. All dimensions of the Financial Development and Structure Database (FDSD) of the World Bank are considered. The main finding is that financial dynamics of depth, activity and size improve inclusive human development, whereas the inability of banks to transform mobilized deposits into credit for financial access negatively affects inclusive human development. Policy implications are discussed in the light of fighting surplus liquidity and providing information sharing offices (like public credit registries and private credit bureaus) that would reduce information asymmetry between lenders and borrowers.

Taxes and Bribes in Uganda

Abstract: Using data from 433 firms operating along Uganda’s charcoal and timber supply chains, we investigate patterns of bribe payment and tax collection between supply chain actors and government officials responsible for collecting taxes and fees. We examine the factors associated with the presence and magnitude of bribe and tax payments using a series of bivariate probit and Tobit regression models. We find empirical support for a number of hypotheses related to payments, highlighting the role of queuing, capital-at-risk, favouritism, networks, and role in the supply chain. We also find that taxes crowd in bribery in the charcoal market.

How do migrants save? Evidence from the British Household Panel Survey on temporary and permanent migrants versus natives

Abstract: This paper investigates the saving behavior of migrants in the UK across different dimensions, i.e., comparing temporary versus permanent migrants and migrants versus natives. Established theoretical predictions show that migrants save more when they plan to stay in the destination only temporarily as target savers. Our empirical evidence takes into account the contemporaneous choice of savings and remittances. Moreover, when comparing the saving profiles of both natives and migrants, we uncover the weight of observable socio-economic characteristics other than income and wealth. We use the British Household Panel Survey for the period 1991-2008. The estimation results confirm that temporary migrants have a propensity to save 26 per cent higher than permanent migrants in UK. We also introduce an index of financial capability adjusted for income as an explanatory variable and, when employing the Blinder-Oaxaca decomposition for the Tobit model of saving choice, migrants are more affected by observable social-economic characteristics than natives.

Trends of cost efficiency in response to financial deregulation: The case of Indian banks

Abstract: Purpose – The purpose of this paper is to examine the trends of cost efficiency (CE) of Indian banks in response to financial deregulation programme launched in early 1990s. More specifically, the findings of this paper offer empirical testing of the basic underlined hypothesis that the CE of banks will rise in the more liberal and competitive environment. Design/methodology/approach – The study employs input-oriented data envelopment analysis (DEA) models that incorporate the quasi-fixed inputs to compute the cost, technical, and allocative efficiency scores for individual banks. The unbalanced panel data spanning from the financial year 1992-1993 to 2007-2008 are used for obtaining efficiency measures. In addition, the panel data Tobit model has been applied to investigate the bank-specific factors explaining variations in the CE. Findings – The empirical findings pertaining to the trends of efficiency measures suggest that: first, deregulation programme has had a positive impact on the CE of Indian ban...

Likelihood-based inference for Tobit confirmatory factor analysis using the multivariate Student-t distribution

Abstract: Factor analysis models have been one of the most popular multivariate methods for data analysis among psychometricians, behavioral and educational researchers. But these models, originally developed for normally distributed observed variables, can be seriously affected by the presence of influential observations and censored data. Motivated by this situation, in this paper we propose a likelihood-based estimation for a multivariate Tobit confirmatory factor analysis model using the Student-t distribution (t-TCFA model). An EM-type algorithm is developed for computing the maximum likelihood estimates, obtaining as a byproduct the standard errors of the fixed effects and the exact likelihood value. Unlike other approaches proposed in the literature, our exact EM-type algorithm uses closed form expressions at the E-step based on the first two moments of a truncated multivariate Student-t distribution with the advantage that these expressions can be computed using standard statistical software. The performance of the proposed methods is illustrated through a simulation study and the analysis of a real dataset of early grade reading assessment test scores.

Determinants of participation of farm households in non-farm enterprise activities in rural nigeria

Abstract: This paper uses the Nigerian nationally representative household level data to examine the factors influencing the decision of farm household to engage in non-farm enterprise (NFE) activities in rural Nigeria. The model was estimated using Tobit regression, and the result shows that NFE participation decision of the household significantly depends on its head’s education, household size, community level infrastructures and its distance to market. Unique to this study, we found that households having access to social and financial capital can overcome the NFEs entry barriers. This suggests that for the development of rural entrepreneurship in the country, the farm households need to be provided with basic education, community infrastructures, effective micro-credit and social network.

Determinants of Farmer Participation in the Vertical Integration of the Rwandan Coffee Value Chain: Results from Huye District

Abstract: This paper presents results on socio-economic factors influencing decision to participate in cooperative and intensity of coffee in Huye District of Rwanda. The analysis uses primary data collected from Huye district with representative sample size of 230 comprised both non-members and members of cooperatives. The study used Probit regression model to test the status of decision to participate and Tobit regression was used to determine the factors influencing the intensity of coffee. The results generally show that gender, education level, farm size, off-farm income, non-access to credits and non-record keeping are all important factors explaining decision to participate. On the other hand, off-farm income, no-access to credit, farm size, experience, farm under other crops cultivation and farm contract agreements found to influence the intensity. The paper concludes by suggesting strategic policy targeting to build stronger farmer’ cooperatives. These should allow the farmers to have access on market, inputs, credit, farm contract, price stability and trainings. Thus improve coffee productivity in terms of quantity and quality in the study area.

Firm Industry Affiliation and Multiple Bank Relationships

Abstract: We explain the number of bank relationships a firm maintains by the number of industries it operates in, analyzing 13,570 listed firms in 18 Eastern European countries. We estimate a variety of stylized models including OLS, Tobit and negative binomial that directly accounts at once for the number of bank relationships. Controlling for many firm characteristics and accounting for all observed and unobserved time-invariant heterogeneity across firms, we find that the number of industries the firm operates in corresponds to a higher number of bank relationships, possibly because banks specialize in certain industries.

Jointly Modelling Individual's Daily Activity-travel Time Use and Mode Share by a Nested Multivariate Tobit Model System☆

Abstract: Understanding mechanisms underlie the individual's daily time allocations is very important to understand the variability of individual's time-space constraints and to forecast his/her daily activity participation At most of previous studies, activity time allocation was viewed as allocating a continuous quantity (daily time budget) into multiple discrete alternatives (ie various activities and trips to engage with) However, few researches considered the influence of travel time that needs to be spent on reaching the activity location Moreover, travel time itself is influenced by individuals’ mode choice This can lead to an over- or under-estimation of particular activity time location In order to explicitly include the individual's travel time and mode choice considerations in activity time allocation modelling, in this study, a nested multivariate Tobit model is proposed This proposed model can handle: 1 Corner solution problem (ie the present of substantial amount of zero observations); 2 Time allocation trade-offs among different types of activities (which tends to be ignored in previous studies); 3 Travel is treated as a derived demand of activity participation (ie travel time and mode share are automatically censored, and are not estimated, if corresponding activity duration is censored) The model is applied on a combined dataset of Swedish national travel survey (NTS) and SMHI (Swedish Meteorological and Hydrological Institute) weather record Individuals’ work and non-work activity durations, travel time and mode shares are jointly modelled as dependent variables The influences of time-location characteristics, individual and household socio demographics and weather characteristics on each dependent variable are examined The estimation results show a strong work and non-work activity time trade-offs due to the individual's time-space constraints Evidences on a potential positive utility of travel time added on non-work activity time allocation in the Swedish case, are also found Meanwhile, the results also show a consistent mode choice preference for a given individual The estimated nested multivariate Tobit model provides a superior prediction, in terms of the deviation of the predicted value against the actual value conditional on the correct prediction regarding censored and non-censored, compared to mutually independent Tobit models However, the nested multivariate Tobit model does not necessarily have a better prediction for model components regarding non-work related activities

The Efficiency Of Local Governments And Its Influence Factors

Abstract: Assessing the relative efficiency of local governments using Data Envelopment Analysis, which are used as input aggregate total expenditure per capita and Local Governvent Output Indicator (LGOI) is used as an aggregate output of each local government. Results showed that local governments can improve the services performance without increasing the spending. Furthermore, the efficiency scores is associated with sosio- economic variables and demographic by using analysis of Tobit, the results show that the variable fiscal as transfer funds and silpa negatively and significantly to the local government efficiency, while the variable population density and degree of fragmentation of political parties and positive effect significantly to the local government efficiency.

Top executive compensation in less developed capital markets

Abstract: Purpose – This paper aims to study the determinants of variable compensation for top Portuguese executives (chief executive officers, chief financial officers and commercial directors). Design/methodology/approach – Data from 101 firms were collected through an email questionnaire sent to the human resource directors of 500 largest and best Portuguese firms of Exame, a business newspaper. A Tobit regression analysis was used to estimate the basic equation of the study. Findings – The conclusions are generally consistent with findings obtained in more developed capital markets. It was found that public and older corporations are more intensive users of variable pay, consistent with the agency theory prediction. A location in the centre of economic activity and a higher executive education increase the propensity to receive higher levels of salary in the form of variable compensation. The relation between compensation and performance was more elusive. Research limitations/implications – There are limitation...

Determinants of Income Diversification among Rural Households of Pakistan

Abstract: This study is designed to determine the poverty status and determinants of income diversification in rural areas of Pakistan using cross sectional data of Pakistan Social and Living Standards Measurement (PSLM) for 2010-2011. The variables used for measuring income diversification are demographic indicators, poverty status, and income of households. Foster-Greer-Thorbecke (FGT) poverty measures show that 43.1% poor and 56.9% non-poor resided in rural areas of Pakistan. A Tobit model was employed to examine the determinants of livelihood diversification among households. The results show that non-poor and female headed household with higher family size diversify more as compared to poor, male headed household with small size of family members. The place of residence (province used as proxy) also plays important role for income diversification. It is recommended to improve the ways of income diversification among rural household to reduce poverty. Keywords : Poverty, Income diversification, Rural Pakistan, Tobit Regression Model, FGT Poverty index

Pattern of Income Diversification Strategies among Rural Farmers in Nnewi North Local Government Area of Anambra State

Abstract: The underlying report contains the result of a General Survey carried out between October and December, 2011 on “pattern of income diversification strategies among rural farmers in Nnewi North Local Government Area of Anambra State.The specific objectives include to; analyse the socio economic characteristics of the respondents in Nnewi North LGA of Anambra State, assess the pattern of income diversification in the study area, estimate the factors influencing income diversification in the study area and to make recommendations based on findings. A multi-stage random sampling technique was used to select 90 rural household in Nnewi North L.G.A. Data was collected using a pre-tested and well structure questionnaire and interview schedule. By descriptive, Herfindahe Index and Tobit Regression Model, data for this study were analyzed. The herfindahe index result indicates that the farmers gross income was N3,166,100.00 per annum. Income generate from livelihood activities contributes to 65.23% of the total income while the contribution of non- farm activities contributed substantially to the many household income in Nnewi North Local Government Area of Anambra State. The result got from Tobit regression shows that the model is well fit as confirmed by the pseudo R 2 of 69%. The sample value of the log likelihood ratio of 45.20 is significant at 1% level of probability. Some constraints of income diversification include; high investment cost, low human capital, risk, credit constraint, lack or inadequate expertise. Keyword s : Income Diversification, rural farmers, Herfindahe index and Tobit regression model

Correlates of Food Insecurity Transition and its Determinants among Farming Households in North Central, Nigeria.

Abstract: This study analysed the Correlates of food insecurity transition and its determinants among farming households in North Central, Nigeria. The data were collected over two-time period from 291 rural households from September to December 2013, during food crops harvesting season (HS) and from April to June 2014, during food crops planting season (PS). Data were analysed using Marcov probability chain, Tobit and Probit regression models. Results showed that there were movements into and out of FI during the two seasons. However, more rural households 72% moved into FI during PS. In the long-run, 86% of households would transit to FI during PS. Probit Regression analysis revealed that household size, educational status of head, age, asset ownership, remittances, occupational status of head, access to credit and access to extension services were factors that significantly determined these movements. Keywords: Correlates of food insecurity, Food insecurity transition, Marcov Probability Chain, Tobit regression model, Probit regression model

Influence of Social Capital on Producer Groups’ Performance and Market Access Amongst Smallholder French beans Farmers in Kirinyaga County, Kenya

Abstract: Market access is a major constraint facing agricultural commercialization in Kenya The pressure on arable land and market changes are mainly felt by the smallholder farmers who are faced with high transaction costs In addition, these farmers face a number of institutional and technical factors putting their market survival at stake To curb these challenges, formation of farmer groups and organizations has become important in bringing about collective action whose basis is social capital However, this capital must be mobilized through group membership and other social dimensions to achieve collective action This paper therefore, sought determine influence of the social capital dimensions, socio-economic and institutional factors on group’s performance The study was conducted in Mwea sub-county, Kirinyaga County and a multistage sampling method was used to obtain a sample of 174 farmers (95 group members and 79 non-group members) who were interviewed using structured questionnaires Descriptive statistics was utilized in characterizing socio-economic attributes of the smallholder French beans farmers Tobit model was used to determine influence of the social capital dimensions and institutional factors on group’s performance The results showed that gender, age, education level, French beans yield, farming experience, transport cost, off-farm income, initial social capital endowment, trust index and meeting attendance significantly influenced the extent of commercialization The results of this study enhanced a better understanding of social capital dimensions in farmer group performance Key words: Social capital, commercialization, Tobit model, French beans

Financial marketization and corporate venturing in China

Abstract: Purpose – The paper aims to empirically examine the role of intra-national institutions in business performance. In particular, the article develops hypotheses regarding financial marketization and business venturing with organizational slack and political connections as moderating variables. Design/methodology/approach – The authors choose listed firms from the pharmaceutical industry in China and focus on the period of 2001-2009. Results from the Hausman specification test indicate that the random effects model is appropriate for data. Because the dependent variable is dichotomous, the random effects logistic regression technique in Stata is used. To check the robustness of the estimation, the random-effects Tobit regression technique in Stata is also used. Overall, models are robust and statistically significant. Findings – It was found that the level of regional financial sector marketization is positively associated with the likelihood of engaging in corporate venturing by firms within the region. Mo...