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The equivalence of three latent class models and ML estimators

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  • Tennekoon, Vidhura S.

Abstract

The purpose of this letter is to show the equivalence of three latent class models; the switching regression model with endogenous switching and a latent outcome (the binary Roy model), the probit model with a systematically misclassified dependent variable, and a trivariate probit model with partial observability. The probit model with measurement error is an enhanced version of existing models which allows for the potential correlation between error terms. Establishing this connection, we hope, will help a researcher working on one of these classes of estimators to benefit from the literature and software related to other families.

Suggested Citation

  • Tennekoon, Vidhura S., 2016. "The equivalence of three latent class models and ML estimators," Economics Letters, Elsevier, vol. 141(C), pages 147-150.
    • Handle: RePEc:eee:ecolet:v:141:y:2016:i:c:p:147-150
    DOI: 10.1016/j.econlet.2016.02.028
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    References listed on IDEAS

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    1. Sean Murphy & Daniel Friesner & Robert Rosenman, 2015. "Opioid Misuse Among Adolescents: New Evidence from a Misclassification Analysis," Applied Health Economics and Health Policy, Springer, vol. 13(2), pages 181-192, April.
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    4. Lewbel, Arthur, 2000. "Identification Of The Binary Choice Model With Misclassification," Econometric Theory, Cambridge University Press, vol. 16(4), pages 603-609, August.
    5. Hausman, J. A. & Abrevaya, Jason & Scott-Morton, F. M., 1998. "Misclassification of the dependent variable in a discrete-response setting," Journal of Econometrics, Elsevier, vol. 87(2), pages 239-269, September.
    6. John M. Abowd & Henry S. Farber, 1982. "Job Queues and the Union Status of Workers," ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
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    8. Vidhura Tennekoon & Robert Rosenman, 2015. "The pot calling the kettle black? A comparison of measures of current tobacco use," Applied Economics, Taylor & Francis Journals, vol. 47(5), pages 431-448, January.
    9. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Binary Roy model; Partial observability model; Misclassified data; Probit model; Switching regression;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General

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