Skip to main content
Article thumbnail
Location of Repository

Health, children, and elderly living arrangements: a multiperiod-multinomial probit model with unobserved heterogeneity and autocorrelated errors

By Axel Borsch-Supan, Vassilis Hajivassiliou, Laurence J. Kotlikoff and John N. Morris


This paper develops a general multiperiod-multinomial probit model for panel data to estimate the living arrangements of the elderly. The model has the following features: (a) In each period choices do not necessarily obey the assumption of independence of irrelevant alternatives. (b) Unobserved person-specific attributes are treated as random effects. These random effects may also be correlated across alternatives. (c) In addition, unobserved choice-specific utility components may persist over some time, creating an autoregressive and/or heteroscedastic error structure. The model is estimated by simulating the choice probabilities in the likelihood function. We examine several variants of the specification of the correlation structure and investigate the extent the biases created by ignoring intertemporal correlations

Topics: HN Social history and conditions. Social problems. Social reform, HB Economic Theory
Publisher: National Bureau for Economic Research
Year: 1990
OAI identifier:
Provided by: LSE Research Online
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • (external link)
  • (external link)
  • Suggested articles

    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.