SPECIFICATION AND ESTIMATION OF THE CENSORED REGRESSION MODEL IN THE PRESENCE OF STOCHASTIC PARAMETER VARIATION

TL;DRAbstract

2to model the parameter variation, whether it is deterministic or random, simple model specifications can be used to study the changing relationships between the variables involved.Along these lines, a random coefficient Tobit model is specified, estimated and tested using an intercountry cross-sectional data set.Before discussing the problem in formal terms, a brief introduction to random coefficient models and Tobit models along with a review of the relevant literature, is necessary. Random Coefficient Models: Rationale, Causes, ClassificationIt is well known that one of the standard assumptions of the classical linear regression model is that the structural parameters are identical for all observations in a sample of data.In other words, the economic structure generating the sample observations is assumed to remain the same for each observation.Thus, there exist a single parameter vector relating the dependent random variable and the nonstochastic explanatory variables, a single fun

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