Point identification in the presence of measurement error in discrete variables: application - wages and disability
This paper addresses the problem of point identification in the presence of measurement error in discrete variables; in particular, it considers the case of having two â€œnoisyâ€ indicators of the same latent variable and without any prior information about the true value of the variable of interest. Based on the concept of the fourfold table and creating a nonlinear system of simultaneous equations from the observed proportions and predicted wages, we examine the need for different assumptions in order to obtain unique solutions for the system. We show that by imposing a simple restriction(s) for the joint misclassification probabilities, it is possible to measure the extent of the misclassification error in that specific variable. The proposed methodology is then used to identify whether people misreport their disability status using data from the British Household Panel Survey. Our results show that the probability of underreporting is greater than the probability of overreporting disability.
|Date of creation:||Aug 2013|
|Date of revision:|
|Contact details of provider:|| Postal: HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Web page: http://www.york.ac.uk/economics/postgrad/herc/hedg/
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.:
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
- Madden, D., 1999.
"Labour Market Discrimination on the Basis of Health: an Application to UK Data,"
99/13, College Dublin, Department of Political Economy-.
- David Madden, 2004. "Labour market discrimination on the basis of health: an application to UK data," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 421-442.
- Melanie K. Jones & Peter J. Sloane, 2010.
"Disability and Skill Mismatch,"
The Economic Record,
The Economic Society of Australia, vol. 86(s1), pages 101-114, 09.
- Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March.
- Brent Kreider & John Pepper, 2008.
"Inferring disability status from corrupt data,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 23(3), pages 329-349.
- John Pepper & Brent Kreider, 2001. "Inferring Disability Status from Corrupt Data," Virginia Economics Online Papers 354, University of Virginia, Department of Economics.
- Kreider, Brent & Pepper, John V., 2003. "Inferring Disability Status from Corrupt Data," Staff General Research Papers Archive 10228, Iowa State University, Department of Economics.
- Robert B. Wallace & A. Regula Herzog, 1995. "Overview of the Health Measures in the Health and Retirement Study," Journal of Human Resources, University of Wisconsin Press, vol. 30, pages s84-s107.
- Jones, Melanie K. & Latreille, Paul L. & Sloane, Peter J., 2007. "Disability and Work: A Review of the British Evidence," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 25, pages 473-498, Abril.
- Kreider, Brent & Pepper, John V., 2003.
"Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors,"
Staff General Research Papers Archive
10229, Iowa State University, Department of Economics.
- Kreider, Brent & Pepper, John V., 2007. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Journal of the American Statistical Association, American Statistical Association, vol. 102, pages 432-441, June.
- Marjorie Baldwin & Edward J. Schumacher, 1999.
"Job Mobility among Workers with Disabilities,"
9911, East Carolina University, Department of Economics.
- Kreider, Brent, 2006. "Partially Identifying the Prevalence of Health Insurance Given Contaminated Sampling Response Error," Staff General Research Papers Archive 12588, Iowa State University, Department of Economics.
- Melanie K. Jones, 2009. "The Employment Effect of the Disability Discrimination Act: Evidence from the Health Survey for England," LABOUR, CEIS, vol. 23(2), pages 349-369, 06.
- Horowitz, Joel L & Manski, Charles F, 1995. "Identification and Robustness with Contaminated and Corrupted Data," Econometrica, Econometric Society, vol. 63(2), pages 281-302, March.
- Christopher R. Bollinger, 2003. "Measurement Error in Human Capital and the Black-White Wage Gap," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 578-585, August.
- Melanie K. Jones & Paul L. Latreille & Peter J. Sloane, 2006. "Disability, gender, and the British labour market," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 407-449, July.
- Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:yor:hectdg:13/16. 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: (Jane Rawlings)
If references are entirely missing, you can add them using this form.