Measurement Error in the Prototypal Job-Search Model.

Statistical analysis of the job-search model has isolated the role played by the minimum observed wage in identifying and estimating behavioral parameters. Estimators based on order statistics, however, are influenced by measurement error in ways that estimators based on averages are not, and there is ample evidence that wage data contain measurement errors. The authors propose a model in which worker behavior is captured by the prototypal search model but wages are observed with error. Copyright 1994 by University of Chicago Press.