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The DOGEV Model

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  • Tim R.L. Fry
  • Mark N. Harris

Abstract

At present, there appears to be no qualitative dependent model that can simultaneously account for data sets in which the variable of interest is potentially ordered but also has strong heterogeneity of the observed outcomes. This heterogeneity of particular outcomes, inherently attracts individuals to them, in addition to that determined by the individual's observed characteristics. An example of such unobserved heterogeneity would be brand-loyalty (or "captivity") in a model of consumer choice. Such heterogeneity of the outcomes, may well result in a pronounced multi-modal distribution of the variable of interest. This paper introduces the Dogit Ordered Generalized Extreme Value (DOGEV) model, which does account for both ordering and captivity (and/or multiple modes) in the data. In the spirit of Manski (1977), the DOGEV model combines a model for choice set generation with the Ordered Generalized Extreme Value model. We illustrate the model using three different empirical examples: a model of employment contract types; an inflationary expectations data set and; a survey of students' evaluations of teaching. These three examples are chosen as they represent different values that the additional ancillary parameters are likely to take in practice.

Suggested Citation

  • Tim R.L. Fry & Mark N. Harris, 2002. "The DOGEV Model," Monash Econometrics and Business Statistics Working Papers 7/02, Monash University, Department of Econometrics and Business Statistics.
    • Handle: RePEc:msh:ebswps:2002-7
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    File URL: http://www.buseco.monash.edu.au/ebs/pubs/wpapers/2002/wp7-02.pdf
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    References listed on IDEAS

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    6. Tse, Y K, 1987. "A Diagnostic Test for the Multinomial Logit Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 283-286, April.
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    Citations

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    Cited by:

    1. R. Aaberge & U. Colombino & T. Wennemo, 2009. "Evaluating Alternative Representations Of The Choice Sets In Models Of Labor Supply," Journal of Economic Surveys, Wiley Blackwell, vol. 23(3), pages 586-612, July.
    2. Gerunov, Anton, 2014. "Критичен Преглед На Основните Подходи За Моделиране На Икономическите Очаквания [A Critical Review of Major Approaches for Modeling Economic Expectations]," MPRA Paper 68797, University Library of Munich, Germany.
    3. Eyob Fissuh & Mark Harris, 2004. "Determinants of Poverty in Eritrea: A Household level Analysis," Econometric Society 2004 Australasian Meetings 364, Econometric Society.

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    More about this item

    Keywords

    Generalized extreme value; Choice set generation; Ordinal data;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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