Systematically misclassified binary dependent variables
Vidhura Tennekoon and
Robert Rosenman
Communications in Statistics - Theory and Methods, 2016, vol. 45, issue 9, 2538-2555
Abstract:
When a binary dependent variable is misclassified, that is, recorded in the category other than where it really belongs, probit and logit estimates are biased and inconsistent. In some cases, the probability of misclassification may vary systematically with covariates, and thus be endogenous. In this paper, we develop an estimation approach that corrects for endogenous misclassification, validate our approach using a simulation study, and apply it to the analysis of a treatment program designed to improve family dynamics. Our results show that endogenous misclassification could lead to potentially incorrect conclusions unless corrected using an appropriate technique.
Date: 2016
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Working Paper: Systematically Misclassified Binary Dependant Variables (2011) 
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DOI: 10.1080/03610926.2014.887105
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