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Self-selectivity bias with a continuous variable: potential pitfall in a common procedure

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  • G. R. Arabsheibani
  • A. Marin

Abstract

When the choice variable is continuous, selectivity bias can in principle be dealt with by a procedure first suggested by Garen (1984). However, work reported in this paper on the estimation of hedonic wage equations with compensation for dangerous jobs, where selectivity bias could arise through the endogenous choice of jobs according to their riskiness, suggests that the Garen technique may not be robust. The lack of robustness comes from collinearity, which is a result of the common situation where the empirical fit of the choice equation is moderately successful but not outstanding.

Suggested Citation

  • G. R. Arabsheibani & A. Marin, 2001. "Self-selectivity bias with a continuous variable: potential pitfall in a common procedure," Applied Economics, Taylor & Francis Journals, vol. 33(15), pages 1903-1910.
    • Handle: RePEc:taf:applec:v:33:y:2001:i:15:p:1903-1910
    DOI: 10.1080/00036840010021726
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    Cited by:

    1. Marcela Parada-Contzen & Andrés Riquelme-Won & Felipe Vasquez-Lavin, 2013. "The value of a statistical life in Chile," Empirical Economics, Springer, vol. 45(3), pages 1073-1087, December.
    2. Beat Hintermann & Anna Alberini & Anil Markandya, 2010. "Estimating the value of safety with labour market data: are the results trustworthy?," Applied Economics, Taylor & Francis Journals, vol. 42(9), pages 1085-1100.
    3. Anna Alberini, 2017. "Measuring the economic value of the effects of chemicals on ecological systems and human health," OECD Environment Working Papers 116, OECD Publishing.
    4. Alberini, Anna & Chiabai, Aline, 2007. "Urban environmental health and sensitive populations: How much are the Italians willing to pay to reduce their risks?," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 239-258, March.
    5. Ferreira, Susana & Martinez-de-Morentin, Sara & Erro-Garcés, Amaya, 2024. "Measuring Job Risks When Hedonic Wage Models Do Not Do the Job," IZA Discussion Papers 16716, Institute of Labor Economics (IZA).
    6. Keith A. Bender & Hosne A. Mridha & James Peoples, 2006. "Risk Compensation for Hospital Workers: Evidence from Relative Wages of Janitors," ILR Review, Cornell University, ILR School, vol. 59(2), pages 226-242, January.

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