Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/85030 
Year of Publication: 
2013
Series/Report no.: 
Jena Economic Research Papers No. 2013-027
Publisher: 
Friedrich Schiller University Jena and Max Planck Institute of Economics, Jena
Abstract: 
This paper examines the consequences of introducing a normally distributed effect into a system where the dependent variable is ordered and the explanatory variable is ordered and endogenous. Using simulation techniques we show that a naive bivariate ordered probit estimator which fails to take a mixed effect into account will result in inconsistent estimates even when identification conditions are optimal. Our results suggest this finding only applies to non-linear endogenous systems.
Subjects: 
bivariate ordered probit
bivariate probit
constant parameters
endogenous binary variables
mixed effects
JEL: 
C35
C36
C51
Document Type: 
Working Paper

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