A Note on Additive Separability and Latent Index Models of Binary Choice: Representation Results

• Autores: Edward Vytlacil
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 68, Nº. 4, 2006, págs. 515-518
• Idioma: inglés
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• Resumen

  • The standard binary choice model in econometrics has the choice determined by a latent index crossing a threshold. The latent index is almost always assumed to be additively separable in observable and unobservable regressors, and most commonly linear in all regressors. This note provides a class of non‐separable latent index functions which will have equivalent representations as additively separable or linear index functions. These results demonstrate that assuming a linear or additively separable latent index function is less restrictive than previously recognized.