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A Latent Variable Mimic Approach To Inferring The Quality Of Life

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  • Rahman, Tauhidur
  • Mittelhammer, Ronald C.
  • Wandschneider, Philip R.

Abstract

This paper makes three principal contributions. First, we propose a new estimator for the unobservable variable models with endogenous causes. We show that under factor analysis type of assumptions, Robinson and Ferrara (1977)'s procedure is not fully efficient, and a more efficient procedure can be obtained by merging Robinson and Ferrara' procedure with that in Joreskog and Goldberger (1975) procedure. The asymptotic properties of the new estimator are compared with these two estimators and results indicate that, with our mixture approach, significant efficiency gains can be achieved. Second, we model the Quality of life (QOL) as an unobservable or latent link variable between observable causes and observable effects, which mitigates problem of bias, inconsistency, and arbitrary weightings of explanatory factors. Third, we estimate and compare QOL indices for 43 countries for the year 1990s, noting differences between countries and over time.

Suggested Citation

  • Rahman, Tauhidur & Mittelhammer, Ronald C. & Wandschneider, Philip R., 2004. "A Latent Variable Mimic Approach To Inferring The Quality Of Life," 2004 Annual meeting, August 1-4, Denver, CO 20351, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea04:20351
    DOI: 10.22004/ag.econ.20351
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    File URL: https://ageconsearch.umn.edu/record/20351/files/sp04ra01.pdf
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    References listed on IDEAS

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    Cited by:

    1. Giuseppina Guagnano & Maria Rita Sebastiani, 2018. "Away from Dissatisfaction, Closer to Well-Being: A Multidimensional Synthetic Measure," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(3), pages 977-997, April.

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