October 2005

IZA DP No. 1795: Blinder-Oaxaca Decomposition for Tobit Models

published in: Applied Economics , 2010, 42 (12), 1569-1575

In this paper, a decomposition method for Tobit-models is derived, which allows the differences in a censored outcome variable between two groups to be decomposed into a part that is explained by differences in observed characteristics and a part attributable to differences in the estimated coefficients. The method is applied to a decomposition of the gender wage gap using German data.