The Identification and Economic Content of Ordered Choice Models with Stochastic Thresholds

52 Pages Posted: 13 Aug 2007

See all articles by Flavio Cunha

Flavio Cunha

University of Pennsylvania - Department of Economics

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Salvador Navarro

University of Western Ontario - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: July 2007

Abstract

This paper extends the widely used ordered choice model by introducing stochastic thresholds and interval-specific outcomes. The model can be interpreted as a generalization of the GAFT (MPH) framework for discrete duration data that jointly models durations and outcomes associated with different stopping times. We establish conditions for nonparametric identification. We interpret the ordered choice model as a special case of a general discrete choice model and as a special case of a dynamic discrete choice model.

Keywords: discrete choice, ordered choice, dynamics

JEL Classification: C31

Suggested Citation

Cunha, Flavio and Heckman, James J. and Navarro, Salvador, The Identification and Economic Content of Ordered Choice Models with Stochastic Thresholds (July 2007). IZA Discussion Paper No. 2940. Available at SSRN: https://ssrn.com/abstract=1006190

Flavio Cunha

University of Pennsylvania - Department of Economics ( email )

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James J. Heckman (Contact Author)

University of Chicago - Department of Economics ( email )

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Salvador Navarro

University of Western Ontario - Department of Economics ( email )

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