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Extensions of the Ordered Response Model Applied to Consumer Valuation of New Products


  • Das, J.W.M.

    (Tilburg University, Center For Economic Research)


In an ordered response model the observed variable is based upon classifying an unobserved variable into one out of a finite number of intervals forming a dissection of the real line (cf. Amemiya, 1981). This model considers the boundaries of the intervals as (unknown) deterministic parameters, the same for every individual. Terza (1985) extended this through the relaxation of the assumed constancy of the boundaries: he allowed the boundaries to be a linear function of observed explanatory variables. We extend the deterministic model by allowing for random boundaries that vary across individuals. A case study on consumer valuation of new products indicates that random boundaries significantly improve the standard ordered response model.

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  • Das, J.W.M., 1995. "Extensions of the Ordered Response Model Applied to Consumer Valuation of New Products," Discussion Paper 1995-15, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:906b1b30-1dcc-47bc-890b-c53af17b3987

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    References listed on IDEAS

    1. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    2. Lee, Myoung-jae, 1992. "Median regression for ordered discrete response," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 59-77.
    3. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
    4. Clark, Andrew E., 1997. "Job satisfaction and gender: Why are women so happy at work?," Labour Economics, Elsevier, vol. 4(4), pages 341-372, December.
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    Cited by:

    1. Dustmann, C. & van Soest, A.H.O., 1999. "Parametric and Semiparametric Estimation in Models with Misclassified Categorical Dependent Variables," Discussion Paper 1999-51, Tilburg University, Center for Economic Research.
    2. Dustmann C. & Van Soest A., 2004. "An Analysis of Speaking Fluency of Immigrants Using Ordered Response Models With Classification Errors," Journal of Business & Economic Statistics, American Statistical Association, vol. 22, pages 312-321, July.

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