Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Heterogeneity in ordered choice models
T2 - a review with applications to self assessed health
AU - Greene, William
AU - Harris, Mark N.
AU - Hollingsworth, Bruce
AU - Weterings, Timothy A.
PY - 2014
Y1 - 2014
N2 - Discrete variables that have an inherent sense of ordering across outcomes are commonly found in large data sets available to many economists, and are often the focus of research. However, assumptions underlying the standard ordered probit (which is usually used to analyse such variables) are not always justified by the data. This study provides a review of the ways in which the ordered probit might be extended to account for additional heterogeneity. Differing from other reviews in scope, application and relevance in economic settings, a series of issues pertaining to choices of variables, and the economic assumptions underlying each model are discussed in the context of measuring the underlying health of respondents. The models are applied to a wave of the household, income and labour dynamics in Australia survey, in order to check the appropriateness of such assumptions in an applied context.
AB - Discrete variables that have an inherent sense of ordering across outcomes are commonly found in large data sets available to many economists, and are often the focus of research. However, assumptions underlying the standard ordered probit (which is usually used to analyse such variables) are not always justified by the data. This study provides a review of the ways in which the ordered probit might be extended to account for additional heterogeneity. Differing from other reviews in scope, application and relevance in economic settings, a series of issues pertaining to choices of variables, and the economic assumptions underlying each model are discussed in the context of measuring the underlying health of respondents. The models are applied to a wave of the household, income and labour dynamics in Australia survey, in order to check the appropriateness of such assumptions in an applied context.
KW - HOPIT model
KW - Incorporating heterogeneity
KW - Maximum likelihood
KW - Ordered choice modelling
KW - Self-assessed health
U2 - 10.1111/joes.12002
DO - 10.1111/joes.12002
M3 - Journal article
VL - 28
SP - 109
EP - 133
JO - Journal of Economic Surveys
JF - Journal of Economic Surveys
SN - 0950-0804
IS - 1
ER -