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Article

The Specification of Dynamic Discrete-Time Two-State Panel Data Models

1
Research School of Economics, The Australian National University, Acton ACT 2601, Australia
2
Motu Economic and Public Policy Research, P.O. Box 24390, Wellington 6142, New Zealand
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Authors to whom correspondence should be addressed.
Econometrics 2019, 7(1), 1; https://doi.org/10.3390/econometrics7010001
Received: 1 November 2018 / Revised: 16 December 2018 / Accepted: 18 December 2018 / Published: 24 December 2018
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. View Full-Text
Keywords: panel data; transition data; binary response; duration analysis; event history analysis; dynamic models; censored data; initial conditions; random effects panel data; transition data; binary response; duration analysis; event history analysis; dynamic models; censored data; initial conditions; random effects
MDPI and ACS Style

Gørgens, T.; Hyslop, D.R. The Specification of Dynamic Discrete-Time Two-State Panel Data Models. Econometrics 2019, 7, 1. https://doi.org/10.3390/econometrics7010001

AMA Style

Gørgens T, Hyslop DR. The Specification of Dynamic Discrete-Time Two-State Panel Data Models. Econometrics. 2019; 7(1):1. https://doi.org/10.3390/econometrics7010001

Chicago/Turabian Style

Gørgens, Tue, and Dean R. Hyslop 2019. "The Specification of Dynamic Discrete-Time Two-State Panel Data Models" Econometrics 7, no. 1: 1. https://doi.org/10.3390/econometrics7010001

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