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Creator: Nelson, Clarence W. (Clarence Walford), 1924- Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 000 Descrizione:
This paper was published with no issue number.
Parola chiave: 9th District, Lumber, Logging, and Black Hills Soggetto: Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth, Q21 - Renewable Resources and Conservation: Demand and Supply; Prices, and Q23 - Renewable Resources and Conservation: Forestry
Creator: Geweke, John and Keane, Michael P. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 237 Abstract:
This paper generalizes the normal probit model of dichotomous choice by introducing mixtures of normals distributions for the disturbance term. By mixing on both the mean and variance parameters and by increasing the number of distributions in the mixture these models effectively remove the normality assumption and are much closer to semiparametric models. When a Bayesian approach is taken, there is an exact finite-sample distribution theory for the choice probability conditional on the covariates. The paper uses artificial data to show how posterior odds ratios can discriminate between normal and nonnormal distributions in probit models. The method is also applied to female labor force participation decisions in a sample with 1,555 observations from the PSID. In this application, Bayes factors strongly favor mixture of normals probit models over the conventional probit model, and the most favored models have mixtures of four normal distributions for the disturbance term.
Parola chiave: Normal mixture, Discrete choice, and Markov chain Monte Carlo Soggetto: C25 - Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities and C11 - Bayesian Analysis: General