Modeling methods for a two-state system with continuous responses

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Abstract
A probabilistic two-step method of analysis is described that overcomes the problems associated with using a single model to analyze data drawn from a two-state system. The two steps of the analysis are (i) to determine the probability that an observation with given characteristics falls in each of the two states of the system and (ii) to estimate the response of the dependent variable in each of the two states as a function of characteristics of observations. Estimating cull volume in standing trees provides an example. This analysis results in two component models that more closely describe the process of interest than is possible with any single model. Statistically sound approximations to confidence intervals and tests of hypotheses for the parameters of each of the component models may be computed.

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