The use of the Tobit model for analyzing measures of health status

Abstract

Self-reported health status is often measured using psychometric or utility indices that provide a score intended to summarize an individual's health. Measurements of health status can be subject to a ceiling effect. Frequently, researchers want to examine relationships between determinants of health and measures of health status. Regression methods that ignore the presence of a ceiling effect, or of censoring in the health status measurements can produce biased coefficient estimates. The Tobit regression model is a frequently used tool for modeling censored variables in econometrics research. The authors carried out a Monte-Carlo simulation study to contrast the performance of the Tobit model for censored data with that of ordinary least squares (OLS) regression. It was demonstrated that in the presence of a ceiling effect, if the conditional distribution of the measure of health status had uniform variance, then the coefficient estimates from the Tobit model have superior performance compared with estimates from OLS regression. However, if the conditional distribution had non-uniform variance, then the Tobit model performed at least as poorly as the OLS model.