TY  - JOUR
AU  - Borjas,George J.
AU  - Sueyoshi,Glenn T.
TI  - A Two-Stage Estimator for Probit Models with Structural Group Effects
JF  - National Bureau of Economic Research Technical Working Paper Series
VL  - No. 146
PY  - 1993
Y2  - November 1993
UR  - http://www.nber.org/papers/t0146
L1  - http://www.nber.org/papers/t0146.pdf
N1  - Author contact info:
George J. Borjas
Harvard Kennedy School
79 JFK Street
Cambridge, MA 02138
Tel: 617/495-1393
Fax: 617/495-9532
E-Mail: gborjas@harvard.edu
AB  - This paper outlines a two-stage technique for estimation and inference in probit models with structural group effects.  The structural group specification belongs to a broader class of random components models.  In particular, individuals in a given group share a common component in the specification of the conditional mean of a latent variable.  For a number of computational reasons, existing random-effects models are impractical for estimation and inference in this type of problem.  Our two-stage estimator provides an easily estimable alternative to the random effect specification.  In addition, we conduct a Monte Carlo simulation comparing the performance of alternative estimators, and find that the two-stage estimator is superior -- both in terms of estimation and inference -- to traditional estimators.
ER  -