A Control Function Approach to Estimating Dynamic Probit Models with Endogenous Regressors, with an Application to the Study of Poverty Persistence in China
This paper proposes a parametric approach to estimating a dynamic binary response panel data model that allows for endogenous contemporaneous regressors. This approach is of particular value for settings in which one wants to estimate the effects o...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100813140147 http://hdl.handle.net/10986/3884 |
| Summary: | This paper proposes a parametric
approach to estimating a dynamic binary response panel data
model that allows for endogenous contemporaneous regressors.
This approach is of particular value for settings in which
one wants to estimate the effects of an endogenous treatment
on a binary outcome. The model is next used to examine the
impact of rural-urban migration on the likelihood that
households in rural China fall below the poverty line. In
this application, it is shown that migration is important
for reducing the likelihood that poor households remain in
poverty and that non-poor households fall into poverty.
Furthermore, it is demonstrated that failure to control for
unobserved heterogeneity would lead the researcher to
underestimate the impact of migrant labor markets on
reducing the probability of falling into poverty. |
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