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Estimating an Earnings Function from Coarsened Data by an Interval Censored Regression Procedure

Author

Listed:
  • Reza Daniels
  • Sandrine Rospabé

    () (University of Cape Town)

Abstract

This paper estimates an earnings function where the dependent variable is a mix of point and interval data using an interval regression model based on a pseudo-maximum likelihood estimation procedure. The analysis uses the 1999 OHS, and takes into account point and interval income observations, as well as design features of the survey including stratification, clustering and weights. In developing and applying the methodology, it is shown that researchers interested in analysing the determinants of income in a meaningful way need not be hampered by the presence of both point and interval observations, and can in fact account for these simultaneously using a generalised Tobit model. By incorporating survey design features into the analysis of the variance, some changes were needed to the estimation procedure and this is where the pseudo-likelihood becomes useful. However, this then affects how the coefficients of the model are interpreted, and researchers are encouraged to focus attention on the confluence of these factors.

Suggested Citation

  • Reza Daniels & Sandrine Rospabé, 2005. "Estimating an Earnings Function from Coarsened Data by an Interval Censored Regression Procedure," Working Papers 05091, University of Cape Town, Development Policy Research Unit.
  • Handle: RePEc:ctw:wpaper:05091
    as

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    File URL: http://www.dpru.uct.ac.za/sites/default/files/image_tool/images/36/DPRU%20WP05-091.pdf
    File Function: First version, 2005
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    References listed on IDEAS

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    1. T. Paul Schultz & Germano Mwabu, 1998. "Labor Unions and the Distribution of Wages and Employment in South Africa," ILR Review, Cornell University, ILR School, vol. 51(4), pages 680-703, July.
    2. Sandrine Rospabéa, 2002. "How Did Labour Market Racial Discrimination Evolve After The End Of Apartheid?," South African Journal of Economics, Economic Society of South Africa, vol. 70(1), pages 185-217, March.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Kristin F. Butcher & Cecilia Elena Rouse, 2001. "Wage Effects of Unions and Industrial Councils in South Africa," ILR Review, Cornell University, ILR School, vol. 54(2), pages 349-374, January.
    5. P. G. Moll, 1993. "Black South African Unions: Relative Wage Effects in International Perspective," ILR Review, Cornell University, ILR School, vol. 46(2), pages 245-261, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Hanley, Nicholas & Hynes, Stephen, 2008. "The "Crex crex" Lament: Estimating Landowners Willingness to Pay for Corncrake Conservation on Irish Farmland," Stirling Economics Discussion Papers 2008-14, University of Stirling, Division of Economics.
    2. Dieter von Fintel, 2006. "Earnings bracket obstacles in household surveys – How sharp are the tools in the shed?," Working Papers 08/2006, Stellenbosch University, Department of Economics.
    3. Stephen Hynes & Nick Hanley, 2008. "Rare Species Conservation on Irish Farmland: Benefits and Costs," Working Papers 0813, Rural Economy and Development Programme,Teagasc.
    4. Hanley, Nicholas & Hynes, Stephen & O'Donoghue, Cathal, 2008. "A combinatorial optimisation approach to non-market environmental benefit aggregation," Stirling Economics Discussion Papers 2008-08, University of Stirling, Division of Economics.
    5. Felipe Lozano R., 2009. "Evaluating An Alternative To Finance Higher Education: Human Capital Contracts In Colombia," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO, November.
    6. Buckley, Cathal & Hynes, Stephen & Mechan, Sarah, 2012. "Operating or not Operating at the Margin: Farmers Willingness to Adopt a Riparian Buffer Zone," Working Papers 148830, Socio-Economic Marine Research Unit, National University of Ireland, Galway.
    7. Reza C. Daniels, 2012. "A Framework for Investigating Micro Data Quality, with Application to South African Labour Market Household Surveys," SALDRU Working Papers 90, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Peter Howley & Stephen Hynes & Cathal O’Donoghue, 2009. "Countryside Preferences: Exploring individuals’ WTP for the protection of traditional rural landscapes," Working Papers 0906, Rural Economy and Development Programme,Teagasc.

    More about this item

    Keywords

    South Africa: Generalised Tobit Model; Pseudo Maximum Likelihood Estimation; Complex Survey Data;

    JEL classification:

    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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