Bayesian Panel Quantile Regression for Binary Outcomes with Correlated Random Effects: An Application on Crime Recidivism in Canada

28 Pages Posted: 10 Feb 2020

See all articles by Georges Bresson

Georges Bresson

ERMES (CNRS), Université Panthéon-Assas Paris II

Guy Lacroix

Université Laval - Département d'Économique; IZA Institute of Labor Economics

Mohammad Arshad Rahman

Indian Institute of Technology Kanpur

Abstract

This article develops a Bayesian approach for estimating panel quantile regression with binary outcomes in the presence of correlated random effects. We construct a working likelihood using an asymmetric Laplace (AL) error distribution and combine it with suitable prior distributions to obtain the complete joint posterior distribution. For posterior inference, we propose two Markov chain Monte Carlo (MCMC) algorithms but prefer the algorithm that exploits the blocking procedure to produce lower autocorrelation in the MCMC draws. We also explain how to use the MCMC draws to calculate the marginal effects, relative risk and odds ratio.The performance of our preferred algorithm is demonstrated in multiple simulation studies and shown to perform extremely well. Furthermore, we implement the proposed framework to study crime recidivism in Quebec, a Canadian Province, using a novel data from the administrative correctional files. Our results suggest that the recently implemented "tough-on-crime" policy of the Canadian government has been largely successful in reducing the probability of repeat offenses in the post-policy period. Besides, our results support existing findings on crime recidivism and offer new insights at various quantiles.

Keywords: Bayesian inference, correlated random effects, crime, panel data, quantile regression, recidivism

JEL Classification: C11, C31, C33, C35, K14, K42

Suggested Citation

Bresson, Georges and Lacroix, Guy and Arshad Rahman, Mohammad, Bayesian Panel Quantile Regression for Binary Outcomes with Correlated Random Effects: An Application on Crime Recidivism in Canada. IZA Discussion Paper No. 12928, Available at SSRN: https://ssrn.com/abstract=3534476

Georges Bresson (Contact Author)

ERMES (CNRS), Université Panthéon-Assas Paris II ( email )

12 Place du Panthéon
Paris, Cedex 5, 75005
France

Guy Lacroix

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-2024 (Phone)
418-656-7798 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Mohammad Arshad Rahman

Indian Institute of Technology Kanpur

IIT Kanpur
kalyanpur
Kanpur, 208016
India

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