FLUID MILK PURCHASES - A MULTIVARIATE TOBIT ANALYSIS

We formulate an econometric model of fluid milk expenditures, taking i nto account two important characteristics: expenditures may be censore d at zero and may be interdependent across milk type. Censoring of flu id milk expenditures is addressed with a generalized Tobit system esti mator. Interdependence of milk expenditures is examined through a like lihood function with no restrictions on elements of the Engel curve er ror covariance matrix. Expenditure function parameters are estimated u sing a March 1991 to March 1992 U.S. consumer panel.