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Cinzia Di Novi
''Sample Selection Correction in Panel Data Models When Selectivity Is Due to Two Sources''
( 2009, Vol. 29 No.4 )
This paper proposes a specification of Wooldridge's (1995) two step estimation method in which selectivity bias is due to two sources rather than one. The main objective of the paper is to show how the method can be applied in practise. The application concerns an important problem in health economics: the presence of asymmetric information in the private health insurance markets on which there exists a large literature. The data for the empirical application is drawn from the 2003/2004 Medical Expenditure Panel Survey in conjunction with the 2002 National Health Interview Survey.
Keywords: multiple sample selection bias; panel data; asymmetric information.
JEL: C3 - Models with Panel Data
C5 - Econometric Modeling: General
Manuscript Received : Jun 25 2009 Manuscript Accepted : Dec 01 2009

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