Copula Bivariate Probit Models: With An Application To Medical Expenditures
AbstractThe bivariate probit model is frequently used for estimating the effect of an endogenous binary regressor (the "treatment") on a binary health outcome variable. This paper discusses simple modifications that maintain the probit assumption for the marginal distributions while introducing non-normal dependence using copulas. In an application of the copula bivariate probit model to the effect of insurance status on the absence of ambulatory health care expen- diture, a model based on the Frank copula outperforms the standard bivariate probit model.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Health Economics.
Volume (Year): 21 (2012)
Issue (Month): 12 (December)
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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749
Other versions of this item:
- Rainer Winkelmann, 2011. "Copula bivariate probit models: with an application to medical expenditures," ECON - Working Papers 029, Department of Economics - University of Zurich.
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- I12 - Health, Education, and Welfare - - Health - - - Health Production
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