IDEAS home Printed from https://ideas.repec.org/p/boc/dsug04/7.html
   My bibliography  Save this paper

Conditional logit versus random coefficient models: An analysis using GLLAMM

Author

Listed:
  • Peter Haan

    (DIW)

Abstract

Estimating labor supply functions using a discrete rather than a continuous specification has become increasingly popular in recent years. The main advantage of the discrete choice approach compared to continuous specifications derives from the possibility to model nonlinearities in budget functions. However, the standard discrete choice approach, the conditional logit model, is based on some restrictive assumptions. Econometric literature has suggested more general discrete choice models. However, these less restrictive specifications have shown to incur very high computational cost, which might obstruct the estimation of confidence intervals of marginal effects or elasticities. It is therefore of particular interest for applied research, which approach is more adequate when analyzing discrete choice models. In my analysis, I estimate different model specifications of a household utility function drawing on micro data of the GSOEP. For the estimation, I employ the Stata program GLLAMM, developed by Sophia Rabe-Hesketh et al. (2001). The idea is to test whether the results derived from the different specifications differ significantly. My findings suggest that for computational reasons, standard discrete choice models that are more restrictive in their assumptions regarding error variances, seem to represent the adequate model choice for the analysis of labor supply functions on basis of the GSOEP.

Suggested Citation

  • Peter Haan, "undated". "Conditional logit versus random coefficient models: An analysis using GLLAMM," German Stata Users' Group Meetings 2004 7, Stata Users Group.
  • Handle: RePEc:boc:dsug04:7
    as

    Download full text from publisher

    File URL: http://www.stata.com/meeting/2german/Haan.pdf
    File Function: Presentation slides
    Download Restriction: no

    References listed on IDEAS

    as
    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. Gustafsson, Siv, 1992. "Separate Taxation and Married Women's Labor Supply: A Comparison of West Germany and Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 5(1), pages 61-85, February.
    3. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
    4. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, December.
    5. Viktor Steiner & Katharina Wrohlich, 2004. "Household Taxation, Income Splitting and Labor Supply Incentives – A Microsimulation Study for Germany," CESifo Economic Studies, CESifo, vol. 50(3), pages 541-568.
    6. Michael Gerfin & Robert E. Leu, 2003. "The Impact of In-Work Benefits on Poverty and Household Labour Supply. A simulation study for Switzerland," Diskussionsschriften dp0304, Universitaet Bern, Departement Volkswirtschaft.
    7. Bonin, Holger & Kempe, Wolfram & Schneider, Hilmar, 2002. "Household Labor Supply Effects of Low-Wage Subsidies in Germany," IZA Discussion Papers 637, Institute for the Study of Labor (IZA).
    8. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
    9. Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2004. "GLLAMM Manual," U.C. Berkeley Division of Biostatistics Working Paper Series 1160, Berkeley Electronic Press.
    10. Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2002. "Reliable estimation of generalized linear mixed models using adaptive quadrature," Stata Journal, StataCorp LP, vol. 2(1), pages 1-21, February.
    11. Laisney, François & Beninger, Denis & Beblo, Miriam, 2003. "Family Tax Splitting: A Microsimulation of its Potential Labour Supply and Intra-household Welfare Effects in Germany," ZEW Discussion Papers 03-32, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boc:dsug04:7. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F Baum). General contact details of provider: http://edirc.repec.org/data/stataea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.