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Equivalent representations of discrete-time two-state panel data models

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  • Gørgens, Tue
  • Hyslop, Dean

Abstract

There are two common approaches to analyzing discrete-time two-state panel data: one focuses on modeling the determinants of state occupancy, the other on modeling the determinants of transition between states. This note shows that there are one-to-one correspondences between the two representations, between the two probability distributions in an unrestricted context, and between low-order Markov models of state occupancy and semi-Markov models of transition between states with strictly limited duration dependence.

Suggested Citation

  • Gørgens, Tue & Hyslop, Dean, 2018. "Equivalent representations of discrete-time two-state panel data models," Economics Letters, Elsevier, vol. 163(C), pages 65-67.
    • Handle: RePEc:eee:ecolet:v:163:y:2018:i:c:p:65-67
    DOI: 10.1016/j.econlet.2017.12.003
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    References listed on IDEAS

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    1. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
    2. Cappellari, Lorenzo & Dorsett, Richard & Haile, Getinet, 2007. "State dependence, duration dependence and unobserved heterogeneity in the employment transitions of the over-50s," ISER Working Paper Series 2007-16, Institute for Social and Economic Research.
    3. Manudeep Bhuller & Christian N. Brinch & Sebastian Königs, 2017. "Time Aggregation and State Dependence in Welfare Receipt," Economic Journal, Royal Economic Society, vol. 127(604), pages 1833-1873, September.
    4. Ann Huff Stevens, 1999. "Climbing out of Poverty, Falling Back in: Measuring the Persistence of Poverty Over Multiple Spells," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 557-588.
    5. Tim Barmby, 1998. "The Relationship between Event History and Discrete Time Duration Models: An Application to the Analysis of Personnel Absenteeism," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(2), pages 261-265, May.
    6. Barmby, Tim, 1998. "The Relationship between Even History and Discrete Time Duration Models: An Application to the Analysis of Personnel Absenteeism," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(2), pages 261-265, May.
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    Cited by:

    1. Tue Gørgens & Dean Robert Hyslop, 2018. "The Specification of Dynamic Discrete-Time Two-State Panel Data Models," Econometrics, MDPI, vol. 7(1), pages 1-16, December.

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    More about this item

    Keywords

    Panel data; Binary response; Dynamic models;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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