Valuing Risk Tradeoffs and Voluntary Insecticide Reduction
16 Pages Posted: 23 May 1997
Fixed search costs associated with locating and purchasing pecans invalidate the Tobit model. Factors such as perceived quality, ease of purchase, and familiarity with marketing outlets influence the fixed costs of pecan purchases. These factors have differing impacts on the probability of purchasing and the amount purchased based on the Heckman model. Failure to apply self- selectivity corrections produces misleading assessments of key variables influencing pecan purchases.
JEL Classification: Q16
Suggested Citation: Suggested Citation