01916cam a22002537 4500001000600000003000500006005001700011008004100028100001900069245013900088260006600227490005100293500001600344520078200360530006101142538007201203538003601275690005501311690009501366710004201461830008601503856003701589856003601626t0228NBER20150528233511.0150528s1998 mau||||fs|||| 000 0 eng d1 aMullahy, John.10aMuch Ado About Twoh[electronic resource]:bReconsidering Retransformation and the Two-Part Model in Health Economics /cJohn Mullahy. aCambridge, Mass.bNational Bureau of Economic Researchc1998.1 aNBER technical working paper seriesvno. t0228 aMarch 1998.3 aIn health economics applications involving outcomes (y) and covariates (x), it is often the case that the central inferential problems of interest involve E[y|x] and its associated partial effects or elasticities. Many such outcomes have two fundamental statistical properties: yĆ²0; and the outcome y=0 is observed with sufficient frequency that the zeros cannot be ignored econometrically. Common approaches to estimation in such instances include Tobit, selection, and two-part models. This paper (1) describes circumstances where the standard two-part model with homoskedastic retransformation will fail to provide consistent inferences about important policy parameters; and (2) demonstrates some alternative approaches that are likely to prove helpful in applications. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aI1 - Health2Journal of Economic Literature class. 7aC2 - Single Equation Models • Single Variables2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aTechnical Working Paper Series (National Bureau of Economic Research)vno. t0228.4 uhttp://www.nber.org/papers/t022841uhttp://dx.doi.org/10.3386/t0228