The Specification of Dynamic Discrete-Time Two-State Panel Data Models
This paper compares two approaches to analyzing longitudinal discrete-time binary outcomes. Dynamic binary response models focus on state occupancy and typically specify low-order Markovian state dependence. Multi-spell duration models focus on transitions between states and typically allow for stat...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2018-12-01
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| Series: | Econometrics |
| Subjects: | |
| Online Access: | http://www.mdpi.com/2225-1146/7/1/1 |
| Summary: | This paper compares two approaches to analyzing longitudinal discrete-time binary outcomes. Dynamic binary response models focus on state occupancy and typically specify low-order Markovian state dependence. Multi-spell duration models focus on transitions between states and typically allow for state-specific duration dependence. We show that the former implicitly impose strong and testable restrictions on the transition probabilities. In a case study of poverty transitions, we show that these restrictions are severely rejected against the more flexible multi-spell duration models. |
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| ISSN: | 2225-1146 |