Correcting the fixed-effect estimator for endogenous switching
In this paper, we propose a two-step estimator for panel data models in which a binary covariate is endogenous. In the first stage, a random-effects probit model is estimated, having the endogenous variable as the left-hand side variable. Correction terms are then constructed and included in the main regression.
|Date of creation:||20 Jul 2007|
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