IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v152y2017icp71-72.html
   My bibliography  Save this article

Two-part models are robust to endogenous selection

Author

Listed:
  • Drukker, David M.

Abstract

This note shows that the two-part model (TPM) can be used to estimate conditional and population-averaged effects of exogenous covariates when there is endogenous selection between the two parts. Much like estimating an average treatment effect on the treated, the TPM estimator only needs estimates of parameters that are recoverable from the observable data to estimate covariate effects. The TPM estimator is consistent for the counter factual of interest when selection between the parts is endogenous because the unobservable parameter is multiplied by zero.

Suggested Citation

  • Drukker, David M., 2017. "Two-part models are robust to endogenous selection," Economics Letters, Elsevier, vol. 152(C), pages 71-72.
  • Handle: RePEc:eee:ecolet:v:152:y:2017:i:c:p:71-72
    DOI: 10.1016/j.econlet.2017.01.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176517300046
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.econlet.2017.01.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Manning, W. G. & Duan, N. & Rogers, W. H., 1987. "Monte Carlo evidence on the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 35(1), pages 59-82, May.
    2. Hay, Joel W & Leu, Robert & Rohrer, Paul, 1987. "Ordinary Least Squares and Sample-Selection Models of Health-Care Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(4), pages 499-506, October.
    3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    4. Leung, Siu Fai & Yu, Shihti, 1996. "On the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 197-229.
    5. Duan, Naihua, et al, 1984. "Choosing between the Sample-Selection Model and the Multi-part Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 283-289, July.
    6. Hay, Joel W & Olsen, Randall J, 1984. "Let Them Eat Cake: A Note on Comparing Alternative Models of the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 279-282, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joan Costa‐Font & Cristina Vilaplana‐Prieto, 2020. "‘More than one red herring'? Heterogeneous effects of ageing on health care utilisation," Health Economics, John Wiley & Sons, Ltd., vol. 29(S1), pages 8-29, October.
    2. Tibor Lalinsky & Jaanika Meriküll, 2021. "The Effect of the Single Currency on Exports: Comparative Firm-Level Evidence," International Journal of Central Banking, International Journal of Central Banking, vol. 17(3), pages 203-239, September.
    3. Laszlo Goerke & Markus Pannenberg, 2023. "Minimum Wage Non-compliance: The Role of Co-determination," SOEPpapers on Multidisciplinary Panel Data Research 1199, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Cefis, Elena & Bartoloni, Eleonora & Bonati, Marco, 2020. "Show me how to live: Firms' financial conditions and innovation during the crisis," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 63-81.
    5. Rancan, Michela & Cariboni, Jessica & Keasey, Kevin & Vallascas, Francesco, 2023. "Bond issuance and the funding choices of European banks: The consequences of public debt," Journal of Empirical Finance, Elsevier, vol. 74(C).
    6. Nguyen, Quyen T.K. & Almodóvar, Paloma & Wei, Ziyi, 2022. "Intra-firm and arm’s length export propensity and intensity of MNE foreign subsidiaries," Journal of Business Research, Elsevier, vol. 145(C), pages 288-308.
    7. Jha, Chandan Kumar & Panda, Bibhudutta & Sahu, Santosh Kumar, 2022. "Institutions and conflict," Economic Modelling, Elsevier, vol. 113(C).
    8. Bell, David N.F. & Hart, Robert A., 2019. "The Decline of Overtime Working in Britain," IZA Discussion Papers 12651, Institute of Labor Economics (IZA).
    9. David Boto-García & José Francisco Baños Pino, 2024. "The economics of second-home tourism: Are there expenditure reallocation effects from accommodation savings?," Tourism Economics, , vol. 30(4), pages 969-995, June.
    10. David N. F. Bell & Robert A. Hart, 2023. "The decline of paid overtime working in Britain," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 235-258, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colin Vance & Nolan Ritter, 2013. "Is Peace a Missing Value or a Zero?," Ruhr Economic Papers 0466, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. repec:zbw:rwirep:0466 is not listed on IDEAS
    3. Vance, Colin & Ritter, Nolan, 2013. "Is Peace a Missing Value or a Zero?," Ruhr Economic Papers 466, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Patrick Puhani, 2000. "The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
    5. Leung, Siu Fai & Yu, Shihti, 1996. "On the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 197-229.
    6. Peter Egger & Mario Larch & Kevin E. Staub & Rainer Winkelmann, 2011. "The Trade Effects of Endogenous Preferential Trade Agreements," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 113-143, August.
    7. Frondel, Manuel & Vance, Colin, 2017. "Cycling on the extensive and intensive margin: The role of paths and prices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 104(C), pages 21-31.
    8. Dapeng Zhang & Xiaokun Wang & José Holguín-Veras & Wei Zou, 2019. "Investigation of carriers’ ability to transfer toll increases: an empirical analysis of freight agents’ relative market power," Transportation, Springer, vol. 46(6), pages 2291-2308, December.
    9. Colin Vance & Ralf Hedel, 2008. "On the Link Between Urban Form and Automobile Use: Evidence from German Survey Data," Land Economics, University of Wisconsin Press, vol. 84(1), pages 51-65.
    10. Borislava Mihaylova & Andrew Briggs & Anthony O'Hagan & Simon G. Thompson, 2011. "Review of statistical methods for analysing healthcare resources and costs," Health Economics, John Wiley & Sons, Ltd., vol. 20(8), pages 897-916, August.
    11. Valerie Albouy & Laurent Davezies & Thierry Debrand, 2009. "Dynamic Estimation of Health Expenditure: A new approach for simulating individual expenditure," Working Papers DT20, IRDES institut for research and information in health economics, revised Jan 2009.
    12. Jeonghoon Ahn, 2004. "Panel Data Sample Selection Model: an Application to Employee Choice of Health Plan Type and Medical Cost Estimation," Econometric Society 2004 Far Eastern Meetings 560, Econometric Society.
    13. Amos Golan & Enrico Moretti & Jeffrey M.Perloff, 2004. "A Small-Sample Estimator for the Sample-Selection Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(1), pages 71-91.
    14. Liu, Lei & Strawderman, Robert L. & Cowen, Mark E. & Shih, Ya-Chen T., 2010. "A flexible two-part random effects model for correlated medical costs," Journal of Health Economics, Elsevier, vol. 29(1), pages 110-123, January.
    15. Manuel Frondel & Colin Vance, 2009. "Driving for Fun? – A Comparison of Weekdays and Weekend Travel," Ruhr Economic Papers 0103, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    16. Frondel, Manuel & Vance, Colin, 2009. "Driving for Fun? – A Comparison of Weekdays and Weekend Travel," Ruhr Economic Papers 103, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    17. Mocan, H. Naci & Tekin, Erdal & Zax, Jeffrey S., 2004. "The Demand for Medical Care in Urban China," World Development, Elsevier, vol. 32(2), pages 289-304, February.
    18. Jianmei Zhao & Hai Zhong, 2015. "Medical expenditure in urban China: a quantile regression analysis," International Journal of Health Economics and Management, Springer, vol. 15(4), pages 387-406, December.
    19. William Martin & Cong S. Pham, 2020. "Estimating the gravity model when zero trade flows are frequent and economically determined," Applied Economics, Taylor & Francis Journals, vol. 52(26), pages 2766-2779, May.
    20. Frondel, Manuel & Vance, Colin, 2010. "Driving for fun? Comparing the effect of fuel prices on weekday and weekend fuel consumption," Energy Economics, Elsevier, vol. 32(1), pages 102-109, January.
    21. Madden, David, 2008. "Sample selection versus two-part models revisited: The case of female smoking and drinking," Journal of Health Economics, Elsevier, vol. 27(2), pages 300-307, March.

    More about this item

    Keywords

    Two-part model; Endogeneity; Counter-factual inference endogenous treatment effect;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:152:y:2017:i:c:p:71-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.