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Estimating Interdependence Across Space, Time and Outcomes in Binary Choice Models Using Pseudo Maximum Likelihood Estimators

Wucherpfennig, Julian and Kachi, Aya and Bormann, Nils-Christian and Hunziker, Philipp. (2018) Estimating Interdependence Across Space, Time and Outcomes in Binary Choice Models Using Pseudo Maximum Likelihood Estimators. WWZ Working Papers, 2018 (11). Basel.

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Official URL: https://edoc.unibas.ch/63425/

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Abstract

Binary outcome models are frequently used in Political Science. However, such models have proven particularly dicult in dealing with interdependent data structures, including spatial autocorrelation, temporal autocorrelation, as well as simultaneity arising from endogenous binary regressors. In each of these cases, the primary source of the estimation challenge is the fact that jointly determined error terms in the reduced-form specication are analytically intractable due to a high-dimensional integral. To deal with this problem, simulation approaches have been proposed, but these are computationally intensive and impractical for datasets with thousands of observations. As a way forward, in this paper we demonstrate how to reduce the computational burder signicantly by (i) introducing analytically tractable pseudo maximum likelihoodestimators for latent binary choice models that exhibit interdependence across space, time and/or outcomes, and by (ii) proposing an implementation strategy that increases computational eciency considerably. Monte-Carlo experiments demonstrate that our estimators perform similarly to existing alternatives in terms of error, but require only a fraction of the computational cost.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Political Economics of Energy Policy (Kachi)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Kachi, Aya
Item Type:Working Paper
Publisher:WWZ
Number of Pages:24
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2018/11
Last Modified:13 Apr 2018 08:39
Deposited On:10 Apr 2018 06:23

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