A Nested Logit Migration Model with Selectivity.

Abstract

The author specifies a multiple discrete-choice migration model with a correction for selectivity in wage equations, and applies a less restrictive technique for modeling multiple discrete choices than in previous studies of migration. The author estimates the model using Venezuelan microdata, and finds evidence of positive selection in some state wage equations. This suggests that migration decisions are made according to the principle of comparative advantage. Evidence is also found of unobserved similarities between some states of Venezuela such that individuals regard them as neither perfectly distinct nor perfect substitutes. Copyright 1987 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.