## Other Applications of the Type 2 Tobit Model

Nelson (1977) noted that a Type 2 Tobit model arises if y0 in (10.2.1) is assumed to be a random variable with its mean equal to a linear combination of independent variables. He reestimated Gronau’s model by the MLE.

In the study of Westin and Gillen (1978), yrepresents the parking cost with x2 including zonal dummies, wage rate (as a proxy for value of walking time), and the square of wage rate. A researcher observes y* = y2 if y2 < C where C represents transit cost, which itself is a function of independent variables plus an error term.

10.8 Type 3 Tobit Model: P(y, < 0) • Р(ул, y2)

10.8.1 Definition and Estimation

The Type 3 Tobit model is defined as follows:

ytt-*ufii + uu 00.8.1)

Уіі = + M2<

Уи = У и if У* > 0 = 0 if у S 0

Уи = Узі if У*>0

= 0 if yf, S0, і" — 1,...

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