Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/79319
Authors: 
Bellemare, Charles
Melenberg, Bertrand
van Soest, Arthur
Year of Publication: 
2002
Series/Report no.: 
cemmap working paper, Centre for Microdata Methods and Practice CWP12/02
Abstract: 
An overview is presented of some parametric and semi-parametric models, estimators, and specification tests that can be used to analyze ordered response variables. In particular, limited dependent variable models that generalize ordered probit are compared to regression models that generalize the linear model. These techniques are then applied to analyze how self-reported satisfaction with household income relates to household income, family composition, and other background variables. Data are drawn from the 1998 wave of the German Socio- Economic Panel. The results are used to estimate equivalence scales and the cost of children. We find that the standard ordered probit model is rejected, while some semi-parametric specifications survive specification tests against nonparametric alternatives. The estimated equivalence scales, however, are often similar for the parametric and semi-parametric specifications.
Subjects: 
Semi–parametric estimation , Ordered Response , Equivalence scales
JEL: 
C14
C35
D12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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