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Sample Selection Correction in Panel Data Models When Selectivity Is Due to Two Sources

Author

Listed:
  • Cinzia Di Novi

    (Polis- Department of Public Policy and Choice, Alessandria, Italy)

Abstract

This paper proposes a specification of Wooldridge's (1995) two step estimation method in which selectivity bias is due to two sources rather than one. The main objective of the paper is to show how the method can be applied in practise. The application concerns an important problem in health economics: the presence of asymmetric information in the private health insurance markets on which there exists a large literature. The data for the empirical application is drawn from the 2003/2004 Medical Expenditure Panel Survey in conjunction with the 2002 National Health Interview Survey.

Suggested Citation

  • Cinzia Di Novi, 2009. "Sample Selection Correction in Panel Data Models When Selectivity Is Due to Two Sources," Economics Bulletin, AccessEcon, vol. 29(4), pages 2967-2980.
    • Handle: RePEc:ebl:ecbull:eb-09-00382
    as

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    References listed on IDEAS

    as
    1. Dustmann, Christian & Rochina-Barrachina, María Engracia, 2000. "Selection Correction in Panel Data Models: An Application to Labour Supply and Wages," IZA Discussion Papers 162, Institute of Labor Economics (IZA).
    2. Keeler, Emmett B & Newhouse, Joseph P & Phelps, C E, 1977. "Deductibles and the Demand for Medical Care Services: The Theory of a Consumer Facing a Variable Price Schedule under Uncertainty," Econometrica, Econometric Society, vol. 45(3), pages 641-655, April.
    3. Christian Dustmann & María Engracia Rochina-Barrachina, 2007. "Selection correction in panel data models: An application to the estimation of females' wage equations," Econometrics Journal, Royal Economic Society, vol. 10(2), pages 263-293, July.
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    Cited by:

    1. Marchese Carla & Ramello Giovanni B., 2011. "In the Beginning Was the Word. Now is the Copyright," Review of Law & Economics, De Gruyter, vol. 7(1), pages 271-289, October.

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    More about this item

    Keywords

    multiple sample selection bias; panel data; asymmetric information.;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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