Endogenous Treatment Effects for Count Data Models with Sample Selection or Endogenous Participation
AbstractIn this paper we propose a method to estimate models in which an endogenous dichotomous treatment affects a count outcome in the presence of either sample selection or endogenous participation using maximum simulated likelihood. We allow for the treatment to have an effect on both the sample selection or the participation rule and the main outcome. Applications of this model are frequent in many fields of economics, such as health, labor, and population economics. We show the performance of the model using data from Kenkel and Terza (2001), which investigates the effect of physician advice on the amount of alcohol consumption. Our estimates suggest that in these data (i) neglecting treatment endogeneity leads to a perversely signed effect of physician advice on drinking intensity, (ii) neglecting endogenous participation leads to an upward biased estimator of the treatment effect of physician advice on drinking intensity.
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Bibliographic InfoPaper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 10/19.
Date of creation: Jul 2010
Date of revision:
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count data; drinking; endogenous participation; maximum simulated likelihood; sample selection; treatment effects;
Other versions of this item:
- Massimiliano Bratti & Alfonso Miranda, 2010. "Endogenous Treatment Effects for Count Data Models with Sample Selection or Endogenous Participation," DoQSS Working Papers 10-05, Department of Quantitative Social Science - Institute of Education, University of London, revised 10 Dec 2010.
- Bratti, Massimiliano & Miranda, Alfonso, 2010. "Endogenous Treatment Effects for Count Data Models with Sample Selection or Endogenous Participation," IZA Discussion Papers 5372, Institute for the Study of Labor (IZA).
- 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
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
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