Identifying Heterogeneity in Economic Choice and Selection Models Using Mixtures
independence of a class of economic choice models. We state an economic property known as reducibility and prove that reducibility ensures linear independence and hence identiﬁcation. Reducibility makes verifying the identiﬁcation of nonlinear models easy. We use our mixtures framework to prove identiﬁcation in three classes of economic models: 1) continuous outcomes including simultaneous equations, 2) multinomial discrete choice, and 3) selection and mixed continuous-discrete choice. We rely on linear independence, not identiﬁcation at inﬁnity. For selection, we allow for essential heterogeneity in both the selection and outcome equations and fully identify the joint distribution of outcomes.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
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