Seminar Vol. 98

Topic: Identification and Estimation of Semiparametric Binary Response Model with Endogenous Regressor

Speaker: Assistant Professor Wei Song, Xiamen University

Time: May 21, 2018, 13:30–15:00

Venue: Conference Room 106B, Zhonghui Building (College of Economics, JNU)

Abstract:

In this paper we develop new results on identification and estimation of semiparametric binary response model with an endogenous explanatory variable. The identification is achieved based on a control variable approach. We also propose a semiparametric estimator, and show that it is root-n-consistent and asymptotically normal. The estimation is based on a nonlinear least square criterion, which we show is equivalent to an integrated maximum score criterion. Monte Carlo simulation shows that the performance of our estimator is consistent with our theory in finite samples. Finally, we apply our estimator to the study of the causal effect of economic conditions on civil conflicts as in Miguel, Satyanath, and Sergenti (2004). In their paper, they use two-stage least square to estimate the effect of economic conditions on civil conflicts. We re-estimate their model using our semiparametric least square estimator.