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State Dependence and Heterogeneity in Health Using a Bias Corrected Fixed Effects Estimator

Jesus Carro () and Alejandra Traferri

No 402, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: This paper considers the estimation of a dynamic ordered probit of self-assessed health status with two fixed effects: one in the linear index equation and one in the cut points. The two fixed effects allow us to robustly control for heterogeneity in unobserved health status and in reporting behaviour, even though we can not separate both sources of heterogeneity. The contributions of this paper are twofold. First it contributes to the literature that studies the determinants and dynamics of Self-Assessed Health measures. Second, this paper contributes to the recent literature on bias correction in nonlinear panel data models with fixed effects by applying and studying the finite sample properties of two of the existing proposals to our model. The most direct and easily applicable correction to our model is not the best one, and has important biases in our sample sizes.

Keywords: Dynamic ordered probit; fixed effects; self-assessed health; reporting bias; panel data; unobserved heterogeneity; incidental parameters; bias correction (search for similar items in EconPapers)
JEL-codes: C23 C25 I19 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-hea
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http://www.economia.uc.cl/docs/dt_402.pdf (application/pdf)

Related works:
Journal Article: STATE DEPENDENCE AND HETEROGENEITY IN HEALTH USING A BIAS‐CORRECTED FIXED‐EFFECTS ESTIMATOR (2014) Downloads
Working Paper: State dependence and heterogeneity in health using a bias corrected fixed effects estimator (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:402

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