Multivariate Decomposition for Hazard Rate Models

Daniel Powers and Myeong-Su Yun ()

No 3971, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a regression decomposition technique for hazard rate models, where the difference in observed rates is decomposed into components attributable to group differences in characteristics and group differences in effects. The baseline hazard is specified using a piecewise constant exponential model, which leads to convenient estimation based on a Poisson regression model fit to person-period, or split-episode data. This specification allows for a flexible representation of the baseline hazard and provides a straightforward way to introduce time-varying covariates and time-varying effects. We provide computational details underlying the method and apply the technique to the decomposition of the black-white difference in first premarital birth rates into components reflecting characteristics and effect contributions of several predictors, as well as the effect contribution attributable to race differences in the baseline hazard.

Keywords: decomposition; piecewise constant exponential model; Poisson regression; hazard rates (search for similar items in EconPapers)
JEL-codes: C20 C41 J13 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2009-01
New Economics Papers: this item is included in nep-ecm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published - published in: Sociological Methodology, 2009, 39(1), 233-263

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