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Random Parmeters and Self-Selection Models

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  • P. Krishnan

Abstract

In this paper I discuss the specification of self-selection models with random parameters. I demostrate that in a self-selection model, misspecification of the parameter structure as constant causes blased estimates, and the direction of the bias leads to an under-estimation of the selectivity effect. I estimate a self-selection model of moonlighting with random parameters and find that: the selectivity effect, which was almost absent in the constant parameter version of the model, is indeed significant.

Suggested Citation

  • P. Krishnan, 1989. "Random Parmeters and Self-Selection Models," Working Papers 78, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:78
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