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- Title
PANEL DATA BINARY RESPONSE MODEL IN A TRIANGULAR SYSTEM.
- Authors
TIWARI, AMARESH K.
- Abstract
We propose a new control function (CF) method for binary response outcomes in a triangular system with unobserved heterogeneity of multiple dimensions. The identified CFs are the expected values of the heterogeneity terms in the reduced form equations conditional on the endogenous, Xi ≡ (xi1, . . . ,xiT), and the ex-ogenous, Zi ≡ (zi1, . . . , ziT), variables. The method requires weaker restrictions compared to traditional CF methods for triangular systems with imposed struc-tures similar to ours, and point-identifies average partial effects with discrete instruments. We discuss semiparametric identification of structural measures us-ing the proposed CFs. An application and Monte Carlo experiments compare several alternative methods with ours.
- Subjects
TRIANGULARIZATION (Mathematics); HETEROGENEITY; DIMENSIONS; EQUATIONS; MATHEMATICAL instruments
- Publication
University of Tartu - Faculty of Economics & Business Administration Working Paper Series, 2018, Issue 110, p1
- ISSN
1406-5967
- Publication type
Article