Extending Unobserved Heterogeneity - A Strategy for Accounting for Respondent Perceptions in the Absence of Suitable Data

Timothy A. Weterings (), Mark Harris and Bruce Hollingsworth

No 12/12, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: This research proposes that, in cases where threshold covariates are either unavailable or difficult to observe, practitioners should treat these characteristics as latent, and use simulated maximum likelihood techniques to control for them. Two econometric frameworks for doing so in a more flexible manner are proposed. The finite sample performance of these new specifications are investigated with the use of Monte Carlo simulation. Applications of successively more flexible models are then given, with extensive post-estimation analysis utilised to better assess the likely implications of model choice on conclusions made in empirical research.

Keywords: Ordered Choice Modeling; Unobserved Heterogeneity; Simulated Maximum Likelihood (search for similar items in EconPapers)
JEL-codes: C01 C23 C52 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2012-05
New Economics Papers: this item is included in nep-cmp, nep-ecm and nep-ore
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://business.monash.edu/econometrics-and-busine ... ions/ebs/wp12-12.pdf (application/pdf)

Related works:
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:msh:ebswps:2012-12

Ordering information: This working paper can be ordered from
http://business.mona ... -business-statistics

Access Statistics for this paper

More papers in Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics PO Box 11E, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Professor Xibin Zhang ().