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Bayesian analysis of the ordered probit model with endogenous selection

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  • Munkin, Murat K.
  • Trivedi, Pravin K.

Abstract

This paper presents a Bayesian analysis of an ordered probit model with endogenous selection. The model can be applied when analyzing ordered outcomes that depend on endogenous covariates that are discrete choice indicators modeled by a multinomial probit model. The model is illustrated by analyzing the effects of different types of medical insurance plans on the level of hospital utilization, allowing for potential endogeneity of insurance status. The estimation is performed using the Markov chain Monte Carlo (MCMC) methods to approximate the posterior distribution of the parameters in the model.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Econometrics.

Volume (Year): 143 (2008)
Issue (Month): 2 (April)
Pages: 334-348

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Handle: RePEc:eee:econom:v:143:y:2008:i:2:p:334-348

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Web page: http://www.elsevier.com/locate/jeconom

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  1. Hanming Fang & Michael P. Keane & Dan Silverman, 2006. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," NBER Working Papers 12289, National Bureau of Economic Research, Inc.
  2. Munkin, Murat K. & Trivedi, Pravin K., 2003. "Bayesian analysis of a self-selection model with multiple outcomes using simulation-based estimation: an application to the demand for healthcare," Journal of Econometrics, Elsevier, Elsevier, vol. 114(2), pages 197-220, June.
  3. Bunch, David S., 1991. "Estimability in the Multinomial Probit Model," University of California Transportation Center, Working Papers qt1gf1t128, University of California Transportation Center.
  4. John Geweke & Gautam Gowrisankaran & Robert J. Town, 2001. "Bayesian Inference for Hospital Quality in a Selection Model," NBER Working Papers 8497, National Bureau of Economic Research, Inc.
  5. McCulloch, Robert E. & Polson, Nicholas G. & Rossi, Peter E., 2000. "A Bayesian analysis of the multinomial probit model with fully identified parameters," Journal of Econometrics, Elsevier, Elsevier, vol. 99(1), pages 173-193, November.
  6. David Card & Carlos Dobkin & Nicole Maestas, 2004. "The Impact of Nearly Universal Insurance Coverage on Health Care Utilization and Health: Evidence from Medicare," Working Papers, RAND Corporation Publications Department 197, RAND Corporation Publications Department.
  7. Li, Mingliang & Tobias, Justin, 2008. "Bayesian Analysis of Treatment Effects in an Ordered Potential Outcomes Model," Staff General Research Papers 12429, Iowa State University, Department of Economics.
  8. John Geweke, 2004. "Getting It Right: Joint Distribution Tests of Posterior Simulators," Journal of the American Statistical Association, American Statistical Association, American Statistical Association, vol. 99, pages 799-804, January.
  9. Chib, Siddhartha & Hamilton, Barton H., 2000. "Bayesian analysis of cross-section and clustered data treatment models," Journal of Econometrics, Elsevier, Elsevier, vol. 97(1), pages 25-50, July.
  10. Lichtenberg Frank R., 2002. "The Effects of Medicare on Health Care Utilization and Outcomes," Forum for Health Economics & Policy, De Gruyter, De Gruyter, vol. 5(1), pages 1-29, January.
  11. Bunch, David S., 1991. "Estimability in the multinomial probit model," Transportation Research Part B: Methodological, Elsevier, vol. 25(1), pages 1-12, February.
  12. Poirier, Dale J & Tobias, Justin, 2003. "On the Predictive Distributions of Outcome Gains in the Presence of an Unidentified Parameter," Staff General Research Papers 12014, Iowa State University, Department of Economics.
  13. Keane, Michael P, 1992. "A Note on Identification in the Multinomial Probit Model," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 10(2), pages 193-200, April.
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Citations

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Cited by:
  1. Stefan Boes, 2013. "Nonparametric analysis of treatment effects in ordered response models," Empirical Economics, Springer, vol. 44(1), pages 81-109, February.
  2. Daniela Benavente, 2010. "Constraining and supporting effects of the multilateral trading system on U.S. unilateralism," IHEID Working Papers 09-2010, Economics Section, The Graduate Institute of International Studies.
  3. Fabbri, Daniele & Monfardini, Chiara, 2011. "Opt Out or Top Up? Voluntary Healthcare Insurance and the Public vs. Private Substitution," IZA Discussion Papers 5952, Institute for the Study of Labor (IZA).
  4. Michael P. Keane & Olena Stavrunova, 2012. "Adverse Selection, Moral Hazard and the Demand for Medigap Insurance," Economics Papers 2012-W10, Economics Group, Nuffield College, University of Oxford.
  5. Li, Mingliang & Mumford, Kevin J. & Tobias, Justin L., 2012. "A Bayesian analysis of payday loans and their regulation," Journal of Econometrics, Elsevier, Elsevier, vol. 171(2), pages 205-216.
  6. Andrés Ramirez Hassan & Johnatan Cardona Jimenez, 2011. "An ordered categorical response model with endogenous switching: Simulation Exercises and an Application to State Health," DOCUMENTOS DE TRABAJO CIEF 010608, UNIVERSIDAD EAFIT.
  7. Rainer Winkelmann, 2012. "Copula Bivariate Probit Models: With An Application To Medical Expenditures," Health Economics, John Wiley & Sons, Ltd., vol. 21(12), pages 1444-1455, December.
  8. William H. Greene & David A. Hensher, 2008. "Modeling Ordered Choices: A Primer and Recent Developments," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 08-26, New York University, Leonard N. Stern School of Business, Department of Economics.
  9. Simon Luechinger & Alois Stutzer & Rainer Winkelmann, 2008. "Self-Selection and Subjective Well-Being: Copula Models with an Application to Public and Private Sector Work," SOEPpapers on Multidisciplinary Panel Data Research 135, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. Andrés Ramírez Hassan & Johnatan Cardona Jimenez & Ramiro Cadavid Montoya, 2011. "The impact of subsidized health insurance on the poor in Colombia: Evaluating the case of Medellin," DOCUMENTOS DE TRABAJO CIEF 010602, UNIVERSIDAD EAFIT.
  11. Rainer Winkelmann, 2009. "Copula-based bivariate binary response models," SOI - Working Papers 0913, Socioeconomic Institute - University of Zurich.
  12. Joshua C.C. Chan & Justin L. Tobias, 2012. "Priors and Posterior Computation in Linear Endogenous Variable Models with Imperfect Instruments," ANU Working Papers in Economics and Econometrics 2012-580, Australian National University, College of Business and Economics, School of Economics.
  13. Munkin, Murat K., 2011. "The Endogenous Sequential Probit model: An application to the demand for hospital utilization," Economics Letters, Elsevier, vol. 112(2), pages 182-185, August.

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