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Identification and estimation of thresholds in the fixed effects ordered logit model

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  • Gregori Baetschmann

Abstract

The paper proposes a new estimator for the fixed effects ordered logit model. In contrast to existing methods, the new procedure allows estimating the thresholds. The empirical relevance and simplicity of implementation is illustrated in an application to the effect of unemployment on life satisfaction.

Suggested Citation

  • Gregori Baetschmann, 2011. "Identification and estimation of thresholds in the fixed effects ordered logit model," ECON - Working Papers 046, Department of Economics - University of Zurich.
  • Handle: RePEc:zur:econwp:046
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    File URL: http://www.econ.uzh.ch/static/wp/econwp046.pdf
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    References listed on IDEAS

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    1. Gregori Baetschmann & Kevin E. Staub & Rainer Winkelmann, 2015. "Consistent estimation of the fixed effects ordered logit model," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(3), pages 685-703, June.
    2. Das, Marcel & van Soest, Arthur, 1999. "A panel data model for subjective information on household income growth," Journal of Economic Behavior & Organization, Elsevier, vol. 40(4), pages 409-426, December.
    3. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    4. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
    5. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
    6. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
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    Cited by:

    1. Francesco, Bartolucci & Silvia, Bacci & Claudia, Pigini, 2015. "A misspecification test for finite-mixture logistic models for clustered binary and ordered responses," MPRA Paper 64220, University Library of Munich, Germany.
    2. Caterina Giannetti & Marianna Madia & Luigi Moretti, 2014. "Job insecurity and financial distress," Applied Financial Economics, Taylor & Francis Journals, vol. 24(4), pages 219-233, February.
    3. Zsóka Kóczán, 2016. "(Why) are immigrants unhappy?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-25, December.
    4. Mujcic, Redzo & Frijters, Paul, 2015. "Conspicuous consumption, conspicuous health, and optimal taxation," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 59-70.

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    More about this item

    Keywords

    Ordered response; panel data; correlated heterogeneity; incidental parameters;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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