Censored regression model

Censored regression models commonly arise in econometrics in cases where data is only available on observations where the variable of interest is positive. The most common example is labor supply. Data is frequently available on the hours worked by employees, and a labor supply model estimates the relationship between hours worked and characteristics of employees such as age, education and family status. However, the results of such estimates, undertaken using linear regression will be biased by the fact that people who have chosen not to work, or have not gained employment.

A related case is that of truncated regression models where data for the zero observations is not available.

• Schnedler, Wendelin (2005). "Likelihood estimation for censored random vectors". Econometric Reviews 24 (2),195–217.