IDEAS home Printed from https://ideas.repec.org/p/arx/papers/1902.06286.html
   My bibliography  Save this paper

Semiparametric correction for endogenous truncation bias with Vox Populi based participation decision

Author

Listed:
  • Nir Billfeld
  • Moshe Kim

Abstract

We synthesize the knowledge present in various scientific disciplines for the development of semiparametric endogenous truncation-proof algorithm, correcting for truncation bias due to endogenous self-selection. This synthesis enriches the algorithm's accuracy, efficiency and applicability. Improving upon the covariate shift assumption, data are intrinsically affected and largely generated by their own behavior (cognition). Refining the concept of Vox Populi (Wisdom of Crowd) allows data points to sort themselves out depending on their estimated latent reference group opinion space. Monte Carlo simulations, based on 2,000,000 different distribution functions, practically generating 100 million realizations, attest to a very high accuracy of our model.

Suggested Citation

  • Nir Billfeld & Moshe Kim, 2019. "Semiparametric correction for endogenous truncation bias with Vox Populi based participation decision," Papers 1902.06286, arXiv.org.
    • Handle: RePEc:arx:papers:1902.06286
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/1902.06286
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. George J. Borjas, 2021. "Ethnic Capital And Intergenerational Mobility," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 6, pages 107-134, World Scientific Publishing Co. Pte. Ltd..
    2. Khan, Shakeeb & Lewbel, Arthur, 2007. "Weighted And Two-Stage Least Squares Estimation Of Semiparametric Truncated Regression Models," Econometric Theory, Cambridge University Press, vol. 23(2), pages 309-347, April.
    3. Honore, Bo E. & Kyriazidou, Ekaterini & Udry, Christopher, 1997. "Estimation of Type 3 Tobit models using symmetric trimming and pairwise comparisons," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 107-128.
    4. Klaus Desmet & Ignacio Ortuño-Ortín & Romain Wacziarg, 2017. "Culture, Ethnicity, and Diversity," American Economic Review, American Economic Association, vol. 107(9), pages 2479-2513, September.
    5. Greene, William H. & Hensher, David A., 2003. "A latent class model for discrete choice analysis: contrasts with mixed logit," Transportation Research Part B: Methodological, Elsevier, vol. 37(8), pages 681-698, September.
    6. Arabmazar, Abbas & Schmidt, Peter, 1982. "An Investigation of the Robustness of the Tobit Estimator to Non-Normality," Econometrica, Econometric Society, vol. 50(4), pages 1055-1063, July.
    7. Charles F. Manski, 2010. "When consensus choice dominates individualism: Jensen's inequality and collective decisions under uncertainty," Quantitative Economics, Econometric Society, vol. 1(1), pages 187-202, July.
    8. Francis X. Diebold & Minchul Shin, 2017. "Beating the Simple Average: Egalitarian LASSO for Combining Economic Forecasts," PIER Working Paper Archive 17-017, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 20 Aug 2017.
    9. Lewbel, Arthur & Schennach, Susanne M., 2007. "A simple ordered data estimator for inverse density weighted expectations," Journal of Econometrics, Elsevier, vol. 136(1), pages 189-211, January.
    10. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    11. Dražen Prelec & H. Sebastian Seung & John McCoy, 2017. "A solution to the single-question crowd wisdom problem," Nature, Nature, vol. 541(7638), pages 532-535, January.
    12. Lee, Myoung-jae, 1993. "Quadratic mode regression," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 1-19.
    13. David V. Budescu & Eva Chen, 2015. "Identifying Expertise to Extract the Wisdom of Crowds," Management Science, INFORMS, vol. 61(2), pages 267-280, February.
    14. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
    15. Breunig, Christoph & Mammen, Enno & Simoni, Anna, 2018. "Nonparametric estimation in case of endogenous selection," Journal of Econometrics, Elsevier, vol. 202(2), pages 268-285.
    16. Friedman, Jerome H., 2012. "Fast sparse regression and classification," International Journal of Forecasting, Elsevier, vol. 28(3), pages 722-738.
    17. Quamrul Ashraf & Oded Galor, 2013. "Genetic Diversity and the Origins of Cultural Fragmentation," American Economic Review, American Economic Association, vol. 103(3), pages 528-533, May.
    18. Brock, William A. & Durlauf, Steven N., 2007. "Identification of binary choice models with social interactions," Journal of Econometrics, Elsevier, vol. 140(1), pages 52-75, September.
    19. Manski, Charles F., 1993. "Dynamic choice in social settings : Learning from the experiences of others," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 121-136, July.
    20. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    21. Horowitz, Joel L., 2014. "Adaptive nonparametric instrumental variables estimation: Empirical choice of the regularization parameter," Journal of Econometrics, Elsevier, vol. 180(2), pages 158-173.
    22. Elizabeth S. Garrett & Scott L. Zeger, 2000. "Latent Class Model Diagnosis," Biometrics, The International Biometric Society, vol. 56(4), pages 1055-1067, December.
    23. Racine, Jeffrey & Su, Liangjun & Ullah, Aman, 2014. "The Oxford Handbook of Applied Nonparametric and Semiparametric Econometrics and Statistics," OUP Catalogue, Oxford University Press, number 9780199857944.
    24. Fan J. & Li R., 2001. "Variable Selection via Nonconcave Penalized Likelihood and its Oracle Properties," Journal of the American Statistical Association, American Statistical Association, vol. 96, pages 1348-1360, December.
    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. Nir Billfeld & Moshe Kim, 2019. "Semiparametric Wavelet-based JPEG IV Estimator for endogenously truncated data," Papers 1908.02166, arXiv.org.

    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. Steven N. Durlauf & Yannis M. Ioannides, 2010. "Social Interactions," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 451-478, September.
    2. Lewbel, Arthur, 2007. "Endogenous selection or treatment model estimation," Journal of Econometrics, Elsevier, vol. 141(2), pages 777-806, December.
    3. Nir Billfeld & Moshe Kim, 2019. "Semiparametric Wavelet-based JPEG IV Estimator for endogenously truncated data," Papers 1908.02166, arXiv.org.
    4. Bauer, Thomas K. & Fertig, Michael & Vorell, Matthias, 2011. "Neighborhood Effects and Individual Unemployment," IZA Discussion Papers 6040, Institute of Labor Economics (IZA).
    5. José Lobo & Charlotta Mellander, 2020. "Let’s stick together: Labor market effects from immigrant neighborhood clustering," Environment and Planning A, , vol. 52(5), pages 953-980, August.
    6. Giulio Zanella, 2004. "Social Interactions and Economic Behavior," Department of Economics University of Siena 441, Department of Economics, University of Siena.
    7. Marini, Annalisa, 2016. "Cultural Beliefs, Values and Economics: A Survey," MPRA Paper 69747, University Library of Munich, Germany.
    8. Marini, Annalisa, 2016. "Immigrants, Trust and Social Traps," MPRA Paper 69627, University Library of Munich, Germany, revised Feb 2016.
    9. Thomas K. Bauer & Michael Fertig & Matthias Vorell, 2011. "Neighborhood Eff ects and Individual Unemployment," Ruhr Economic Papers 0285, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    10. repec:zbw:rwirep:0285 is not listed on IDEAS
    11. Di Fang & Timothy J. Richards, 2018. "New Maize Variety Adoption in Mozambique: A Spatial Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 469-488, September.
    12. Chi, Feng & Yang, Nathan, 2010. "Twitter Adoption in Congress: Who Tweets First?," MPRA Paper 23225, University Library of Munich, Germany.
    13. Ruomeng Cui & Dennis J. Zhang & Achal Bassamboo, 2019. "Learning from Inventory Availability Information: Evidence from Field Experiments on Amazon," Management Science, INFORMS, vol. 65(3), pages 1216-1235, March.
    14. Fishman, Arthur & Fishman, Ram & Gneezy, Uri, 2019. "A tale of two food stands: Observational learning in the field," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 101-108.
    15. Philippe Jehiel, 2022. "Analogy-Based Expectation Equilibrium and Related Concepts:Theory, Applications, and Beyond," Working Papers halshs-03735680, HAL.
    16. Emilio Depetris-Chauvin & Ömer Özak, 2020. "The origins of the division of labor in pre-industrial times," Journal of Economic Growth, Springer, vol. 25(3), pages 297-340, September.
    17. R. Bentley & Michael O’Brien & Paul Ormerod, 2011. "Quality versus mere popularity: a conceptual map for understanding human behavior," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 10(2), pages 181-191, December.
    18. Giulio Zanella, 2004. "Discrete Choice with Social Interactions and Endogenous Memberships," Department of Economics University of Siena 442, Department of Economics, University of Siena.
    19. Bet Caeyers, 2014. "Peer effects in development programme awareness of vulnerable groups in rural Tanzania," CSAE Working Paper Series 2014-11, Centre for the Study of African Economies, University of Oxford.
    20. Patrick Bayer & Stephen L. Ross, 2006. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working papers 2006-13, University of Connecticut, Department of Economics, revised Jan 2009.
    21. Christian Cordes & Stephan Müller & Georg Schwesinger & Sarianna M. Lundan, 2022. "Governance structures, cultural distance, and socialization dynamics: further challenges for the modern corporation," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 371-397, April.

    More about this item

    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:arx:papers:1902.06286. 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.