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Semiparametric Censored Regression Models

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  • Kenneth Y. Chay
  • James L. Powell

Abstract

When data are censored, ordinary least squares regression can provide biased coefficient estimates. Maximum likelihood approaches to this problem are valid only if the error distribution is correctly specified, which can be problematic in practice. We review several semiparametric estimators for the censored regression model that do not require parameterization of the error distribution. These estimators are used to examine changes in black-white earnings inequality during the 1960s based on censored tax records. The results show that there was significant earnings convergence among black and white men in the American South after the passage of the 1964 Civil Rights Act.

Suggested Citation

  • Kenneth Y. Chay & James L. Powell, 2001. "Semiparametric Censored Regression Models," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 29-42, Fall.
    • Handle: RePEc:aea:jecper:v:15:y:2001:i:4:p:29-42
    Note: DOI: 10.1257/jep.15.4.29
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.15.4.29
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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