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• Margarita Genius

The sample selection model is based upon a bivariate or a multivariate structure, and distributional assumptions are in this context more severe than in univariate settings, due to the limited availability of tractable multivariate distributions. While the standard FIML estimation of the selectivity model assumes normality of the joint distribution, alternative approaches require less stringent distributional hypotheses. As shown by Smith (2003), copulas allow great flexibility also in FIML models. The copula model is very useful in situations where the applied researcher has a prior on the distributional form of the margins, since it allows separating their modelling from that of the dependence structure. In the present paper the copula approach to sample selection is first compared to the semiparametric approach and to the standard FIML, bivariate normal model, in an illustrative application on female work data. Then its performance is analysed more thoroughly in an application to Contingent Valuation data on recreational values of forests.

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Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200308.

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Date of creation: 2003
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Handle: RePEc:cns:cnscwp:200308

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Related research

Keywords: Contingent Valuation; Selectivity Bias; Bivariate Models; Copulas;

Find related papers by JEL classification:
C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

This paper has been announced in the following NEP Reports:

• NEP-ALL-2004-07-26 (All new papers)
• NEP-ENV-2004-07-26 (Environmental Economics)

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This page was last updated on 2009-11-27.