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A simple estimator for the correlated random coefficient model

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  • De Blander, Rembert

Abstract

This note presents an estimator for the linear correlated random coefficient model which is an extension of Garen's (1984) selectivity bias method. The choice between the proposed estimator and IV estimation reflects a trade-off between efficiency and first-stage reduced form robustness.

Suggested Citation

  • De Blander, Rembert, 2010. "A simple estimator for the correlated random coefficient model," Economics Letters, Elsevier, vol. 106(3), pages 158-161, March.
    • Handle: RePEc:eee:ecolet:v:106:y:2010:i:3:p:158-161
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    References listed on IDEAS

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    1. Wooldridge, Jeffrey M., 2003. "Further results on instrumental variables estimation of average treatment effects in the correlated random coefficient model," Economics Letters, Elsevier, vol. 79(2), pages 185-191, May.
    2. Vella, Francis & Verbeek, Marno, 1999. "Estimating and Interpreting Models with Endogenous Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 473-478, October.
    3. Michael C. Lovell, 1963. "Seasonal Adjustment of Economic Time Series and Multiple Regression," Cowles Foundation Discussion Papers 151, Cowles Foundation for Research in Economics, Yale University.
    4. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
    5. Garen, John, 1984. "The Returns to Schooling: A Selectivity Bias Approach with a Continuous Choice Variable," Econometrica, Econometric Society, vol. 52(5), pages 1199-1218, September.
    6. Wooldridge, Jeffrey M., 1997. "On two stage least squares estimation of the average treatment effect in a random coefficient model," Economics Letters, Elsevier, vol. 56(2), pages 129-133, October.
    7. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
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    Cited by:

    1. Sande, Jon Bingen & Haugland, Sven A., 2015. "Strategic performance effects of misaligned formal contracting: The mediating role of relational contracting," International Journal of Research in Marketing, Elsevier, vol. 32(2), pages 187-194.

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