Endogenous variables in non-linear models with mixed effects : inconsistence under perfect identification conditions?

by Franz Buscha; Anna Conte

This paper examines the consequences of introducing a normally distributed effect into a system where the dependent variable is ordered and the explanatory variable is ordered and endogenous. Using simulation techniques we show that a naive bivariate ordered probit estimator which fails to take a mixed effect into account will result in inconsistent estimates even when identification conditions are optimal. Our results suggest this finding only applies to non-linear endogenous systems.

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Year of publication:	2013
Authors:	Buscha, Franz ; Conte, Anna
Publisher:	Jena : Univ. [u.a.]
Subject:	bivariate ordered probit \| bivariate probit \| constant parameters \| endogenous binary variables \| mixed effects \| Probit-Modell \| Probit model \| Theorie \| Theory