A copula-based approach to accommodate residential self-selection effects in travel behavior modeling
The dominant approach in the literature to dealing with sample selection is to assume a bivariate normality assumption directly on the error terms, or on transformed error terms, in the discrete and continuous equations. Such an assumption can be restrictive and inappropriate, since the implication is a linear and symmetrical dependency structure between the error terms. In this paper, we introduce and apply a flexible approach to sample selection in the context of built environment effects on travel behavior. The approach is based on the concept of a "copula", which is a multivariate functional form for the joint distribution of random variables derived purely from pre-specified parametric marginal distributions of each random variable. The copula concept has been recognized in the statistics field for several decades now, but it is only recently that it has been explicitly recognized and employed in the econometrics field. The copula-based approach retains a parametric specification for the bivariate dependency, but allows testing of several parametric structures to characterize the dependency. The empirical context in the current paper is a model of residential neighborhood choice and daily household vehicle miles of travel (VMT), using the 2000 San Francisco Bay Area Household Travel Survey (BATS). The sample selection hypothesis is that households select their residence locations based on their travel needs, which implies that observed VMT differences between households residing in neo-urbanist and conventional neighborhoods cannot be attributed entirely to the built environment variations between the two neighborhoods types. The results indicate that, in the empirical context of the current study, the VMT differences between households in different neighborhood types may be attributed to both built environment effects and residential self-selection effects. As importantly, the study indicates that use of a traditional Gaussian bivariate distribution to characterize the relationship in errors between residential choice and VMT can lead to misleading implications about built environment effects.
Volume (Year): 43 (2009)
Issue (Month): 7 (August)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
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.:
- James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
- Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
- James J. Heckman & Edward Vytlacil, 2005.
"Structural Equations, Treatment Effects, and Econometric Policy Evaluation,"
Econometric Society, vol. 73(3), pages 669-738, 05.
- James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects and Econometric Policy Evaluation," NBER Working Papers 11259, National Bureau of Economic Research, Inc.
- James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects and Econometric Policy Evaluation," NBER Technical Working Papers 0306, National Bureau of Economic Research, Inc.
- Trivedi, Pravin K. & Zimmer, David M., 2007. "Copula Modeling: An Introduction for Practitioners," Foundations and Trends(R) in Econometrics, now publishers, vol. 1(1), pages 1-111, April.
- Heckman, James J. & Vytlacil, Edward J., 2000. "The relationship between treatment parameters within a latent variable framework," Economics Letters, Elsevier, vol. 66(1), pages 33-39, January.
- Bhat, Chandra R. & Guo, Jessica Y., 2007. "A comprehensive analysis of built environment characteristics on household residential choice and auto ownership levels," Transportation Research Part B: Methodological, Elsevier, vol. 41(5), pages 506-526, June.
- Erika Spissu & Abdul Pinjari & Ram Pendyala & Chandra Bhat, 2009. "A copula-based joint multinomial discrete–continuous model of vehicle type choice and miles of travel," Transportation, Springer, vol. 36(4), pages 403-422, July.
- Matzkin, Rosa L., 1993. "Nonparametric identification and estimation of polychotomous choice models," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 137-168, July.
- Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
- Lu, Xuedong & Pas, Eric I., 1999. "Socio-demographics, activity participation and travel behavior," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(1), pages 1-18, January.
- Siu Fai Leung & Shihti Yu, 2000. "Collinearity and Two-Step Estimation of Sample Selection Models: Problems, Origins, and Remedies," Computational Economics, Springer;Society for Computational Economics, vol. 15(3), pages 173-199, June.
- Leung, S.F. & Yu, S., 1996. "Collinearity and Two-Step Estimation of Sample Selection Models: Problems, Origins and Remedies," RCER Working Papers 419, University of Rochester - Center for Economic Research (RCER).
- Chandra Bhat & Ipek Sener, 2009. "A copula-based closed-form binary logit choice model for accommodating spatial correlation across observational units," Journal of Geographical Systems, Springer, vol. 11(3), pages 243-272, September.
- Joe, H., 1993. "Parametric Families of Multivariate Distributions with Given Margins," Journal of Multivariate Analysis, Elsevier, vol. 46(2), pages 262-282, August.
- Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
- A. Colin Cameron & Tong Li & Pravin K. Trivedi & David M. Zimmer, 2004. "Modelling the differences in counted outcomes using bivariate copula models with application to mismeasured counts," Econometrics Journal, Royal Economic Society, vol. 7(2), pages 566-584, December.
- A. Colin Cameron & Tong Li & Pravin K. Trivedi & David M. Zimmer, 2004. "Modeling the Differences in Counted Outcomes using Bivariate Copula Models: with Application to Mismeasured Counts," Working Papers 43, University of California, Davis, Department of Economics.
- Cosslett, Stephen R, 1983. "Distribution-Free Maximum Likelihood Estimator of the Binary Choice Model," Econometrica, Econometric Society, vol. 51(3), pages 765-782, May.
- Huard, David & Evin, Guillaume & Favre, Anne-Catherine, 2006. "Bayesian copula selection," Computational Statistics & Data Analysis, Elsevier, vol. 51(2), pages 809-822, November.
- Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
- Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- James Heckman & Justin L. Tobias & Edward Vytlacil, 2001. "Four Parameters of Interest in the Evaluation of Social Programs," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 210-223, October.
- Heckman, J J & Tobias, Justin & Vytlacil, Ed, 2001. "Four Parameters of Interest in the Evaluation of Social Programs," Staff General Research Papers Archive 12022, Iowa State University, Department of Economics.
- Lung-Fei Lee, 1982. "Some Approaches to the Correction of Selectivity Bias," Review of Economic Studies, Oxford University Press, vol. 49(3), pages 355-372.
- Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
- Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
- Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-798, May.
- Margarita Genius & Elisabetta Strazzera, 2008. "Applying the copula approach to sample selection modelling," Applied Economics, Taylor & Francis Journals, vol. 40(11), pages 1443-1455.
- A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
- Casey Quinn, 2007. "The health-economic applications of copulas: methods in applied econometric research," Health, Econometrics and Data Group (HEDG) Working Papers 07/22, HEDG, c/o Department of Economics, University of York.
- Briesch R.A. & Chintagunta P.K. & Matzkin R.L., 2002. "Semiparametric Estimation of Brand Choice Behavior," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 973-982, December.
- Murray D. Smith, 2005. "Using Copulas to Model Switching Regimes with an Application to Child Labour," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages 47-57, 08.
- Zimmer, David M. & Trivedi, Pravin K., 2006. "Using Trivariate Copulas to Model Sample Selection and Treatment Effects: Application to Family Health Care Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 24, pages 63-76, January.
- Markus Junker & Angelika May, 2005. "Measurement of aggregate risk with copulas," Econometrics Journal, Royal Economic Society, vol. 8(3), pages 428-454, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:43:y:2009:i:7:p:749-765. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.