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Endogeneity in Semiparametric Binary Response Models
Abstract
This paper develops and implements semiparametric methods for estimating binary response (binary choice) models with continuous endogenous regressors. It extends existing results on semiparametric estimation in single-index binary response models to the case of endogenous regressors. It develops a control function approach to account for endogeneity in triangular and fully simultaneous binary response models. The proposed estimation method is applied to estimate the income effect in a labour market participation problem using a large micro data-set from the British Family Expenditure Survey. The semiparametric estimator is found to perform well, detecting a significant attenuation bias. The proposed estimator is contrasted to the corresponding probit and linear probability specifications.
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Cited by
Recent Developments in the Econometrics of Program Evaluation
Imbens, G. W., & Wooldridge, J. M. (2009) · Journal of Economic Literature · doi:10.1257/jel.47.1.5 · Cited by 4,926
Mendelian randomization: Using genes as instruments for making causal inferences in epidemiology
Lawlor, D. A., Harbord, R. M., Sterne, J. A. C., Timpson, N., & Davey Smith, G. (2008) · Statistics in Medicine · doi:10.1002/sim.3034 · Cited by 4,618
Innovation and Institutional Ownership
Aghion, P., Van Reenen, J. M., & Zingales, L. (2010) · SSRN Electronic Journal · doi:10.2139/ssrn.1669323 · Cited by 553
Alternative Approaches to Evaluation in Empirical Microeconomics
Blundell, R., & Costa Dias, M. (2009) · Journal of Human Resources · doi:10.1353/jhr.2009.0009 · Cited by 394
Self-citationWooldridge, J. M. (2014) · Journal of Econometrics · doi:10.1016/j.jeconom.2014.04.020 · Cited by 307
Metadata
- Authors
- BLUNDELL, R. W., & POWELL, J. L.
- Venue
- Review of Economic Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2004-07
- Volume
- 71
- Issue
- 3
- Pages
- 655-679
- ISSN
- 0034-6527 (ISSN-L)
- 1467-937X
- OpenAlex
- W3126059685
- Cited by
- 390
- References
- 0
- FWCI
- 8.20
- Type
- journal article
- Language
- en
- Open access
- closed
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- BLUNDELL, R. W., & POWELL, J. L. (2004). Endogeneity in Semiparametric Binary Response Models. Review of Economic Studies. https://doi.org/10.1111/j.1467-937x.2004.00299.x
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