Limited and censored dependent variable models

Abstract

In regional science, many attributes, either social or natural, can be categorical. For example, choices of travel mode, presidential election outcomes, or quality of life can all be measured (and/or coded) as discrete responses, dependent on various influential factors. Some attributes, although continuous, are subject to truncation or censoring. For example, household income, when reported, tends to be censored, and only boundary values of a range are obtained. Such categorical and censored variables can be analyzed using econometric models that are established based on the concept of “unobserved/latent dependent variable.".