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Parametric and Semiparametric Estimation in Models with Misclassified Categorical Dependent Variables

  • Dustmann, Christian


    (University College London)

  • van Soest, Arthur


    (Tilburg University)

We consider both a parametric and a semiparametric method to account for classification errors on the dependent variable in an ordered response model. The methods are applied to the analysis of self-reported speaking fluency of male immigrants in Germany. We find that a parametric model which explicitly allows for misclassification performs better than a standard ordered probit model and than a model with random thresholds. We find some substantial differences in parameter estimates and predictions of the different models.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 218.

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Length: 45 pages
Date of creation: Nov 2000
Date of revision:
Publication status: published in: Journal of Business and Economic Statistics, 2004, 22 (3), 312-321
Handle: RePEc:iza:izadps:dp218
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  1. Das, J.W.M. & van Soest, A.H.O., 1997. "Expected and realized income changes : Evidence from the Dutch socio-economic panel," Other publications TiSEM bdbe10dd-649c-4521-ab28-7, Tilburg University, School of Economics and Management.
  2. Lee, Lung-Fei & Porter, Robert H, 1984. "Switching Regression Models with Imperfect Sample Separation Information-With an Application on Cartel Stability," Econometrica, Econometric Society, vol. 52(2), pages 391-418, March.
  3. Rivera-Batiz, Francisco L., 1990. "English language proficiency and the economic progress of immigrants," Economics Letters, Elsevier, vol. 34(3), pages 295-300, November.
  4. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  5. Douglas, Stratford M & Conway, Karen Smith & Ferrier, Gary D, 1995. "A Switching Frontier Model for Imperfect Sample Separation Information: With an Application to Constrained Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 503-29, May.
  6. Dustmann, Christian, 1994. "Speaking Fluency, Writing Fluency and Earnings of Migrants," Journal of Population Economics, Springer, vol. 7(2), pages 133-56.
  7. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  8. Hausman, J. A. & Abrevaya, Jason & Scott-Morton, F. M., 1998. "Misclassification of the dependent variable in a discrete-response setting," Journal of Econometrics, Elsevier, vol. 87(2), pages 239-269, September.
  9. Han, Aaron K., 1987. "Non-parametric analysis of a generalized regression model : The maximum rank correlation estimator," Journal of Econometrics, Elsevier, vol. 35(2-3), pages 303-316, July.
  10. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
  11. McManus, Walter & Gould, William & Welch, Finis, 1983. "Earnings of Hispanic Men: The Role of English Language Proficiency," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 101-30, April.
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