Advanced Search
MyIDEAS: Login

Semiparametric duration analysis with an endogenous binary variable: An application to hospital stays

Contents:

Author Info

  • Masuhara, Hiroaki
Registered author(s):

    Abstract

    Background: In duration analysis, we find situations where covariates are simultaneously determined along with the duration variable. Moreover, although the models based on a hazard rate do not explicitly assume heterogeneity, in applied econometrics, the possibility of omitted variables is inevitable and controlling population heterogeneity alone is inadequate. It is important to consider both heterogeneity and endogeneity in duration analysis. Objectives and methods: Explicitly assuming semiparametric correlated heterogeneity, this paper proposes an alternative robust duration model with an endogenous binary variable that generalizes the heterogeneity of both duration and endogeneity using Hermite polynomials. Under these setups, we investigate the difference between the endogenous binary variable's coefficients of the parametric and semiparametric models using the Medical Expenditure Panel Survey (MEPS) data. Results: The parameter values of the endogenous binary variable (insurance choice) are statistically significant at the 1% level; however, the values differ among the parametric and semiparametric models and the any type of insurance choice increases the length of hospital stays by 104.010% in the censored parametric model, and 182.074% in the censored semiparametric model. Compared with the parametric model, the increase of hospital stays in the semiparametric model is large. Moreover, we find that the semiparametric model a twin-peak distribution and that the contour lines differ from the usual ellipsoids of the bivariate normal density. Conclusions: When applied to the duration of hospital stays of the MEPS data, the estimated results of the semiparametric model shows a good performance. The absolute values of the endogenous binary regressor coefficients of the semiparametric models are larger than that of the parametric model. The parametric model underestimates the effect of the individual's insurance choice in our example. Moreover, the estimated densities of the semiparametric models have twin peak distribution.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/25589/1/DP597.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University in its series CIS Discussion paper series with number 597.

    as in new window
    Length: [20] p.
    Date of creation: Mar 2013
    Date of revision:
    Handle: RePEc:hit:cisdps:597

    Contact details of provider:
    Postal: 2-1 Naka, Kunitachi City, Tokyo 186-8603
    Phone: +81-42-580-8336
    Fax: +81-42-580-8333
    Email:
    Web page: http://cis.ier.hit-u.ac.jp/
    More information through EDIRC

    Related research

    Keywords: Endogenous switching; duration analysis; probit; semi-nonparametric model; heterogeneity;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    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.:
    as in new window
    1. van der Klaauw, Bas & Koning, Ruud H, 2003. "Testing the Normality Assumption in the Sample Selection Model with an Application to Travel Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 31-42, January.
    2. Vassilis A. Hajivassiliou, 1993. "A Simulation Estimation Analysis of the External Debt Crises of Developing Countries," Working Papers _022, Yale University.
    3. Hiroaki Masuhara, 2007. "Semi-nonparametric estimation of regression-based survival models," Economics Bulletin, AccessEcon, vol. 3(61), pages 1-12.
    4. repec:ebl:ecbull:v:3:y:2007:i:61:p:1-12 is not listed on IDEAS
    5. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
    6. Govert Bijwaard & Geert Ridder, 1998. "Correcting for Selective Compliance in a Re-employment Bonus Experiment," Tinbergen Institute Discussion Papers 98-096/4, Tinbergen Institute.
    7. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, October.
    8. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
    9. Donald S. Kenkel & Joseph V. Terza, 2001. "The effect of physician advice on alcohol consumption: count regression with an endogenous treatment effect," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(2), pages 165-184.
    10. Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:hit:cisdps:597. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Resources Section, Hitotsubashi University Library).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.