Semiparametric duration analysis with an endogenous binary variable: An application to hospital stays
Background: In duration analysis, we find situations where covariates are simultaneously determined along with the duration variable. Moreover, although the models based on a hazard rate do not explicitly assume heterogeneity, in applied econometrics, the possibility of omitted variables is inevitable and controlling population heterogeneity alone is inadequate. It is important to consider both heterogeneity and endogeneity in duration analysis. Objectives and methods: Explicitly assuming semiparametric correlated heterogeneity, this paper proposes an alternative robust duration model with an endogenous binary variable that generalizes the heterogeneity of both duration and endogeneity using Hermite polynomials. Under these setups, we investigate the difference between the endogenous binary variable's coefficients of the parametric and semiparametric models using the Medical Expenditure Panel Survey (MEPS) data. Results: The parameter values of the endogenous binary variable (insurance choice) are statistically significant at the 1% level; however, the values differ among the parametric and semiparametric models and the any type of insurance choice increases the length of hospital stays by 104.010% in the censored parametric model, and 182.074% in the censored semiparametric model. Compared with the parametric model, the increase of hospital stays in the semiparametric model is large. Moreover, we find that the semiparametric model a twin-peak distribution and that the contour lines differ from the usual ellipsoids of the bivariate normal density. Conclusions: When applied to the duration of hospital stays of the MEPS data, the estimated results of the semiparametric model shows a good performance. The absolute values of the endogenous binary regressor coefficients of the semiparametric models are larger than that of the parametric model. The parametric model underestimates the effect of the individual's insurance choice in our example. Moreover, the estimated densities of the semiparametric models have twin peak distribution.
|Date of creation:||Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://cis.ier.hit-u.ac.jp/
More information through EDIRC
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.:
- Govert Bijwaard & Geert Ridder, 1998.
"Correcting for Selective Compliance in a Re-Employment Bonus Experiment,"
Economics Working Paper Archive
412, The Johns Hopkins University,Department of Economics.
- Bijwaard, Govert E. & Ridder, Geert, 2005. "Correcting for selective compliance in a re-employment bonus experiment," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 77-111.
- repec:ebl:ecbull:v:3:y:2008:i:42:p:1-13 is not listed on IDEAS
- Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2.
- Hiroaki Masuhara, 2007. "Semi-nonparametric estimation of regression-based survival models," Economics Bulletin, AccessEcon, vol. 3(61), pages 1-12.
- Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
- Vassilis A. Hajivassiliou, 1993.
"A Simulation Estimation Analysis of the External Debt Crises of Developing Countries,"
_022, Yale University.
- Hajivassiliou, V A, 1994. "A Simulation Estimation Analysis of the External Debt Crises of Developing Countries," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(2), pages 109-31, April-Jun.
- Hajivassiliou, 1993. "A Simulation Estimation Analysis of the External Debt Crises of Developing Countries," Cowles Foundation Discussion Papers 1057, Cowles Foundation for Research in Economics, Yale University.
- repec:ebl:ecbull:v:3:y:2007:i:61:p:1-12 is not listed on IDEAS
- van der Klaauw, Bas & Koning, Ruud H, 2003. "Testing the Normality Assumption in the Sample Selection Model with an Application to Travel Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 31-42, January.
- Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
- Donald S. Kenkel & Joseph V. Terza, 2001. "The effect of physician advice on alcohol consumption: count regression with an endogenous treatment effect," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(2), pages 165-184.
- Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
When requesting a correction, please mention this item's handle: RePEc:hit:cisdps:597. 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: (Digital Resources Section, Hitotsubashi University Library)The email address of this maintainer does not seem to be valid anymore. Please ask Digital Resources Section, Hitotsubashi University Library to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.