Modeling Selectivity in Count-Data Models

Abstract

This article presents a method for modeling endogenous selectivity in count data. As in the case of the switching-regression model, two regimes are distinguished with potentially different data-generating processes. The regime choice is allowed to be correlated with the observed count in each of the regimes. An estimable model is obtained by transforming the underlying processes to the bivariate normal distribution. An empirical application on trip count is provided.