In an ordered response model the observed variable is based upon classifying an unobserved variable into one out of a finite number of intervals forming a dissection of the real line (cf. Amemiya, 1981). This model considers the boundaries of the intervals as (unknown) deterministic parameters, the same for every individual. Terza (1985) extended this through the relaxation of the assumed constancy of the boundaries: he allowed the boundaries to be a linear function of observed explanatory variables. We extend the deterministic model by allowing for random boundaries that vary across individuals. A case study on consumer valuation of new products indicates that random boundaries significantly improve the standard ordered response model.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number
15.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: