Removing specification errors from the usual formulation of binary choice models

P.A.V.B. Swamy, I-Lok Chang, Jatinder S. Mehta, William H. Greene, Stephen G. Hall and George S. Tavlas

We develop a procedure for removing four major specification errors from the usual formulation of binary choice models. The model that results from this procedure is different from the conventional probit and logit models. This difference arises as a direct consequence of our relaxation of the usual assumption that omitted regressors constituting the error term of a latent linear regression model do not introduce omitted regressor biases into the coefficients of the included regressors.

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Year of publication:	June 2016
Authors:	Swamy, Paravastu A. V. B. ; Chang, I-Lok ; Mehta, Jatinder S. ; Greene, William ; Hall, Stephen G. ; Tavlas, George S.
Published in:	Econometrics : open access journal. - Basel : MDPI, ISSN 2225-1146, ZDB-ID 2717594-7. - Vol. 4.2016, 2, p. 1-21
Subject:	binary choice models \| specification errors \| stochastic coefficients \| Präferenztheorie \| Theory of preferences \| Modellierung \| Scientific modelling \| Schätztheorie \| Estimation theory \| Statistischer Fehler \| Statistical error

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Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.3390/econometrics4020026 [DOI] hdl:10419/171877 [Handle]
Classification:	C13 - Estimation ; C51 - Model Construction and Estimation
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011506387