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Panel Data Binary Response Model In A Triangular System

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  • Amaresh K Tiwari

Abstract

We propose a new control function (CF) method for binary response outcomes in a triangular system with unobserved heterogeneity of multiple dimensions. The identified CFs are the expected values of the heterogeneity terms in the reduced form equations conditional on the endogenous, Xi ≡ (xi1, . . . ,xiT ), and the exogenous, Zi ≡ (zi1, . . . , ziT ), variables. The method requires weaker restrictions compared to traditional CF methods for triangular systems with imposed structures similar to ours, and point-identifies average partial effects with discrete instruments. We discuss semiparametric identification of structural measures using the proposed CFs. An application and Monte Carlo experiments compare several alternative methods with ours.

Suggested Citation

  • Amaresh K Tiwari, 2018. "Panel Data Binary Response Model In A Triangular System," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 110, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    • Handle: RePEc:mtk:febawb:110
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    References listed on IDEAS

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    1. Newey, Whitney K., 1984. "A method of moments interpretation of sequential estimators," Economics Letters, Elsevier, vol. 14(2-3), pages 201-206.
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    More about this item

    Keywords

    Control Functions; Unobserved Heterogeneity; Identification; Instrumental Variables; Average Partial Effects; Child Labor.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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