Modeling Nonnegativity Via Truncated Logistic and Normal Distributions: An Application to Ranch Land Price Analysis

Abstract

This study presents an empirical method of modeling the nonnegativity of dependent variables using truncated logistic and normal disturbance distributions. The method is applied in estimating a ranch land hedonic price function. Results show that the degree of truncation is significant.

Keywords

• logistic and normal distributions
• model misspecification
• nonnegativity
• ranch land prices
• truncation