Handling Excess Zeros in Count Models for Recreation Demand Analysis Without Apology
CER-ETH – Center of Economic Research at ETH Zurich, Working Paper 16/253, August 2016
26 Pages Posted: 4 Aug 2016
Date Written: July 21, 2016
Abstract
Hurdle and zero-inflated models are the two foremost methods used to deal with excess zeros. However, their reliance on the nonparticipation assumption is a drawback when applied to recreation demand analysis because there is not a theoretical framework convincingly explaining presence of non-participants. This paper discusses how latent class count models represent a theoretically consistent alternative to handle excess zeros. The theoretical model behind a latent class model does not require the non-participation assumption. Instead, excess zeros is explained as the accumulation of Corner solutions from individuals belonging to different classes.
Keywords: C29, Q26, Q51
JEL Classification: Excess zeros, Latent class count models, Travel Cost Method
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