Tweedie Model for Analyzing Zero-Inflated Continuous Response: An Application to Job Training Data

Continuous data with substantial proportion of zero values arise often in many disciplines. Modeling such zero-inflated data is always challenging. We use Tweedie model to analyze zero-inflated continuous outcome with a view to evaluate the effect of job training on future earnings, and also on the difference between pre- and post-training earnings. We further assess the effect of pre-training earnings on the post-training earnings. We used data from a job training program in the USA where 445 subjects were followed for three years. Results suggest that job training has statistically significant impact (p-value <0.05) on future earnings, as well as on the change in pre- and post-training earnings. The effect of pre-training earnings on post-training earnings is however not found to be statistically significant. We found the Tweedie model to be particularly suitable for analyzing zero-inflated data to make valid statistical inference.