We address the issue of endogenous expenditures in the context of a censored demand system by an augmented regression approach estimated with a two-step estimator. An application to food demand by urban households in Mozambique shows that accounting for endogeneity is potentially important in...

This paper investigates the presence of habit formation in household consumption, using data from the Panel Study of Income Dynamics. We develop an econometric model of internal habit formation of the multiplicative specification. The restrictions of the model allow for classical measurement...

Empirically analyzing household behavior usually relies on informal data preprocessing. That is, before an econometric model is estimated, observations are selected in such a way that the resulting subset of data can be assumed to be sufficiently homogeneous with respect to the specific research...

There is considerable interest in measuring tax noncompliance using microeconomic data. One such method estimates income under-reporting by self-employed households by assuming a known, parametric form of the Engel curve and making the further parametric assumption that self-employed households...