Nonparametric Identification of a Binary Random Factor in Cross Section Data

Yingying Dong and Arthur Lewbel

No 707, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Suppose V and U are two independent mean zero random variables, where V has an asymmetric distribution with two mass points and U has a symmetric distribution. We show that the distributions of V and U are nonparametrically identified just from observing the sum V+U, and provide a rate root n estimator. We apply these results to the world income distribution to measure the extent of convergence over time, where the values V can take on correspond to country types, i.e., wealthy versus poor countries. We also extend our results to include covariates X, showing that we can nonparametrically identify and estimate cross section regression models of the form Y=g(X,D*)+U, where D* is an unobserved binary regressor.

Keywords: Mixture model; Random effects; Binary; Unobserved factor; Unobserved regressor; Nonparametric identification; Deconvolution; Treatment (search for similar items in EconPapers)
JEL-codes: C21 C25 (search for similar items in EconPapers)
Date: 2009-06-16, Revised 2010-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://fmwww.bc.edu/EC-P/wp707.pdf main text (application/pdf)

Related works:
Journal Article: Nonparametric identification of a binary random factor in cross section data (2011)
Working Paper: Nonparametric identification of a binary random factor in cross section data (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:707

Access Statistics for this paper

More papers in Boston College Working Papers in Economics from Boston College Department of Economics Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F Baum ().