SUMMARY This paper estimates a dynamic ordered probit model of self‐assessed health with two fixed effects: one in the linear index equation and one in the cut‐points. This robustly controls for heterogeneity in unobserved health status and in reporting behavior, although we cannot separate...

We examine demand behaviour for intertemporal dependencies, using Spanish panel data. We present evidence that there is both state dependence and correlated heterogeneity in demand behaviour. Our specific findings are that food outside the home, alcohol and tobacco are habit forming, whereas...