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Endogenous Treatment Effects for Count Data Models with Sample Selection or Endogenous Participation

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  • Bratti, M.
  • Miranda, A

Abstract

In 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.

Suggested Citation

  • Bratti, M. & Miranda, A, 2010. "Endogenous Treatment Effects for Count Data Models with Sample Selection or Endogenous Participation," Health, Econometrics and Data Group (HEDG) Working Papers 10/19, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:10/19
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    References listed on IDEAS

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    7. Alfonso Miranda, 2004. "FIML estimation of an endogenous switching model for count data," Stata Journal, StataCorp LP, vol. 4(1), pages 40-49, March.
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    9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
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    16. William Greene, 2009. "Models for count data with endogenous participation," Empirical Economics, Springer, vol. 36(1), pages 133-173, February.
    17. Andreas Million & Regina T. Riphahn & Achim Wambach, 2003. "Incentive effects in the demand for health care: a bivariate panel count data estimation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(4), pages 387-405.
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    19. Terza, Joseph V., 1998. "Estimating count data models with endogenous switching: Sample selection and endogenous treatment effects," Journal of Econometrics, Elsevier, vol. 84(1), pages 129-154, May.
    20. Joseph V. Terza & Donald S. Kenkel & Tsui‐Fang Lin & Shinichi Sakata, 2008. "Care‐giver advice as a preventive measure for drinking during pregnancy: zeros, categorical outcome responses, and endogeneity," Health Economics, John Wiley & Sons, Ltd., vol. 17(1), pages 41-54, January.
    21. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
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    Cited by:

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    2. Bopp, C. & Engler, A. & Poortvliet, M. & Jara-Rojas, R., 2018. "Soil conservation behavior among annual crop farmers: the moderating role of intrinsic on extrinsic motivations," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277300, International Association of Agricultural Economists.
    3. Rajendran, Srinivasulu & Afari-Sefa, Victor & Karanja, Daniel Kimani & Musebe, Richard & Romney, Dannie & Makaranga, Magesa A. & Samali, Silvest & Kessy, Radegunda Francis, 2016. "Farmer-Led Seed Enterprise Initiatives to Access Certified Seed for Traditional African Vegetables and its Effect on Incomes in Tanzania," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(1), pages 1-24, February.
    4. Oyenubi, Adeola & Kollamparambil, Umakrishnan, 2022. "Does the child support grant incentivise childbirth in South Africa?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 812-825.

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    More about this item

    Keywords

    count data; drinking; endogenous participation; maximum simulated likelihood; sample selection; treatment effects;
    All these keywords.

    JEL classification:

    • 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 Behavior
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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