Tobit Quantile Regression and Iraqi Banks' Profit
Tobit Quantile Regression and Iraqi Banks' Profit

Summary/Abstract: Banks play a great role in the economy of states, by supporting various economic activities. Achieving profit is considered as the main goal for all banks, as it guarantees their continuity and it enables them to overcome financial crises. Profit depends on a set of factors, which will be studied in the present paper as independent variables. The Iraqi banks' profit is considered as response variable and the study of Iraqi banks' profit uses quantile regression model. But in some cases, banks don’t achieve profit or their profit is near zero. The Tobit quantile regression is a suitable model for this data. For estimating parameters of Tobit quantile regression, two methods are employed: classical Tobit quantile regression method, proposed by Powell (1986) using programming [R], function "cqr" including package “quantreg” and Bayesian compound Tobit quantile regression by building the algorithm Markov Chain Monte Carlo (MCMC).

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