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Many economic applications involve the modeling of a binary variable as simultaneously determined with one of its dycotomous regressors. In this paper we deal with a prominent health economics case study, that of cesarean section delivery utilization across public and private hospitals. Estimating the probability of cesarean section in a univariate framework neglecting the potential endogeneity of the hospital type dummy might lead to invalid inference. Since little is known about the exact sampling properties of alternative statistics for testing exogeneity of a dycotomous regressor in probit models, we conduct an extensive Monte Carlo experiment. Equipped with the simulation results we apply a comprehensive battery of tests to an Italian sample of women and find clear evidence against exogeneity of the hospital type dummy. We speculate on the economic implications of these results and discuss the misleading interpretation arising from the adoption of either univariate probit model or seemingly unrelated bivariate probit model.
We conduct an extensive Monte Carlo experiment to examine the finite samples properties of maximum likelihood based inference in the bivariate probit model with endogenous dummy. We analyse the relative performance of alternative exogeneity tests, the impact of distributional misspecification and the role of exclusion restrictions to achieve parameter identification in practice. The results of our investigation allow us to draw some important guidelines for the applied econometric practice.
Following theseminal Palgrave Handbook of Econometrics: Volume I , this second volume brings together the finestacademicsworking in econometrics today andexploresapplied econometrics, containing contributions onsubjects includinggrowth/development econometrics and applied econometrics and computing.
It is increasingly common for analysts to seek out the opinions of individuals and organizations using attitudinal scales such as degree of satisfaction or importance attached to an issue. Examples include levels of obesity, seriousness of a health condition, attitudes towards service levels, opinions on products, voting intentions, and the degree of clarity of contracts. Ordered choice models provide a relevant methodology for capturing the sources of influence that explain the choice made amongst a set of ordered alternatives. The methods have evolved to a level of sophistication that can allow for heterogeneity in the threshold parameters, in the explanatory variables (through random parameters), and in the decomposition of the residual variance. This book brings together contributions in ordered choice modeling from a number of disciplines, synthesizing developments over the last fifty years, and suggests useful extensions to account for the wide range of sources of influence on choice.
"In a recent survey of 820 Boro (winter rice), potato, bean, eggplant, cabbage, sugarcane, and mango farmers in Bangladesh, over 47 percent of farmers were found to be overusing pesticides. With only 4 percent of farmers formally trained in pesticide use or handling, and over 87 percent openly admitting to using little or no protective measures while applying pesticides, overuse is potentially a threatening problem to farmer health as well as the environment. To model pesticide overuse, the authors used a 3-equation, trivariate probit framework, with health effects and misperception of pesticide risk as endogenous dummy variables. Health effects (the first equation) were found to be strictly a function of the amount of pesticides used in production, while misperception of pesticide risk (the second equation) was determined by health impairments from pesticides and the toxicity of chemicals used. Pesticide overuse (the third equation) was significantly determined by variation in income, farm ownership, the toxicity of chemicals used, crop composition, and geographical location. The results highlight the necessity for policymakers to design effective and targeted outreach programs that deal specifically with pesticide risk, safe handling, and averting behavior. Ideally, the approach would be participatory in nature to address key informational gaps, as well as increasing a farmers' awareness retention. The results also point to specific crops and locations experiencing a higher prevalence of overuse-bean and eggplant in general-and overall production in the districts of Chapainawabganj, Chittagong, Comilla, Jessore, Narshingdi, Rajshahi, and Rangpur. Focusing efforts in these crop and geographical areas may have the most measurable effects on pesticide overuse. "--World Bank web site.
"As pesticide traders are important sources of information about the health impacts of pesticides, a crucial understanding of their perception is necessary to guide further pesticide information dissemination efforts through this channel. To this end, a 2003 survey of 110 Bangladeshi pesticide traders was conducted with questions on the pesticides in stock, knowledge and training in pesticide use and handling, sources of information, protective measures, and health effects. A two-equation bivariate probit model was initially estimated for health impairment and trader perception with health effects as an endogenous regressor in the perception equation. Results indicate that pesticide toxicity, exposure in terms of number of years spent in the pesticide business, trader's age (experience), and the interaction between the most harmful pesticides and training received in pesticide use and handling were the significant determinants of health impairment status. Risk perception was determined by actual health impairment status, pesticide toxicity, the average number of hours spent in the shop per day, training, and the interaction term between highly toxic substances and training. The evidence suggests that the current information content may not be effective, and thus training programs should be revised with a greater emphasis on health hazards and averting behavior. "--World Bank web site.
"The research in this dissertation is targeted at revealing the similarities and differences in European early retirement institutions, including unemployment and disability schemes. In addition, using longitudinal data from a large number of European countries, the determinants of early retirement decisions are analysed empirically and the role played by institutions is surveyed. This research shows that both less tight entitlement conditions and high generosity of early retirement schemes exert a disincentive effect on staying in work for the older worker."--Back page.