We now consider the Tobit model that applies to the full data set.

a. Formulate the log-likelihood for this very simple Tobit model.

b. Reformulate the log-likelihood in terms of θ = 1/σ and γ = μ/σ. Then derive the necessary conditions for maximizing the log-likelihood with respect to θ and γ.

c. Discuss how you would obtain the values of θ and γ to solve the problem in Part b.

d. Compute the maximum likelihood estimates of μ and σ.