Thomas A. Mroz

Binary outcomes and endogenous explanatory variables: Tests and solutions with an application to the demand for contraceptive use in tunisia

Many demographic studies examine discrete outcomes, and researchers often suspect that some of the explanatory variables may be influenced by the same unobserved factors that determine the discrete outcome under examination. In linear models, the standard solution to this potential endogeneity bias is an estimator such as two-stage least squares. These methods have been extended to models with limited dependent variables, but there is little information on the performance of the methods in the types of data sets typically used in demographic research. This paper helps to fill this gap. It describes a simple analytic framework for estimating the effects of explanatory variables on discrete outcomes, which controls for the potential endogeneity of explanatory variables. It also discusses tests for exogeneity and joint determination of the outcomes and the explanatory variables. It summarizes the results of a Monte Carlo study of the performance of these techniques and uses these results to suggest how researchers should approach these problems in practice. We apply these methods to the examination of the impact of fertility intentions on contraceptive use, based on data from the 1988 Tunisia Demographic and Health Survey.

Discrete factor approximations in simultaneous equation models: estimating the impact of a dummy endogenous variable on a continuous outcome.

This paper contains a Monte Carlo evaluation of estimators used to control for endogeneity of dummy explanatory variables in continuous outcome regression models. When the true model has bivariate normal disturbances, estimators using discrete factor approximations compare favorably to efficient estimators in terms of precision and bias; these approximation estimators dominate all the other estimators examined when the disturbances are non-normal. The experiments also indicate that one should liberally add points of support to the discrete factor distribution. The paper concludes with an application of the discrete factor approximation to the estimation of the impact of marriage on wages.

The Long-Term Effects of Youth Unemployment

Using NLSY data, we examine the long-term effects of youth unemployment on later labor market outcomes. Involuntary unemployment may yield suboptimal investments in human capital in the short run. A theoretical model of dynamic human capital investment predicts a rational “catch-up” response. Using semiparametric techniques to control for the endogeneity of prior behavior, our estimates provide strong evidence of this response. We also find evidence of persistence in unemployment. Combining our semiparametric estimates with a dynamic approximation to the lifecycle, we find that unemployment experienced as long ago as ten years continues to affect earnings adversely despite the catch-up response.

Structural change in the impact of income on food consumption in China, 1989-1993.

China is undergoing a marked transition in its diet and nutritional status patterns. This study determines the structural change in the impact of income on food consumption in China during 1989-93. Utilizing data from a longitudinal study of 3800 households in China evidence points to a shift in the relationship between income dietary structure and total nutrient intake at the macrolevel. Overall it is noted that the increase in income over time in the country coincided with a shift in the demand for inferior and normal food groups. In addition there was a pronounced increase in the income elasticity for more luxury foods during the specified period while less superior goods became more inferior over this 4-year span. Such an increase in income elasticities for total energy and for energy from fat suggest a worsening of the composition of the diet in ways that are linked to obesity and obesity-related diseases as incomes continue to rise. In view of this several implications for the formulation of future nutrition policies in China are cited.

Alcohol use and wages: New results from the national household survey on drug abuse

A recent study published in the Journal of Health Economics by French and Zarkin [French, M.T., Zarkin, G.A., 1995. Is moderate alcohol use related to wages? Evidence from four worksites, Journal of Health Economics 14, 319-344] found evidence of a positive, inverse-U-shaped relationship between wages and alcohol consumption for individuals at four worksites. In this paper, we attempted to replicate French and Zarkins findings using a combined sample of prime-age workers from the 1991 and 1992 National Household Surveys on Drug Abuse (NHSDA). Whereas French and Zarkin found that individuals who consume approximately 1.5 to 2.5 drinks per day have higher wages than non-drinkers and heavy drinkers, we found no evidence of a turning point at this consumption level for either men or women. Our results do suggest that men who use alcohol have approximately 7% higher wages than men who do not drink, and this apparent wage premium is approximately the same over a wide range of alcohol consumption. For women, the estimated alcohol use premium is approximately half as large as for men and is statistically insignificant.

Purposive program placement and the estimation of family planning program effects in Tanzania

Abstract Most studies evaluating the impact of family planning on fertility treat the presence of family planning clinics as being “randomly” assigned among the areas included in the study. They tend to ignore the possibility that the distribution of services may be related to the fertility level observed in a particular area. In some cases the distribution of services may respond to a conscious effort by public authorities or funding agencies to target areas with observed higher fertility. Even in absence of program planning, the factors determining service placement might be related to the determinants of high, or low, fertility in a particular area. If that is the case, and one fails to account for the endogeneity of family planning services, then the estimated impact of family planning programs will be biased. This article presents a modeling approach to address this issue. The model extends the simultaneous equation framework by integrating an individual-level model of timing and spacing of children ...

An Evaluation of the National Longitudinal Survey on Youth

One point of debate in the recent controversy in the media and among policy analysts over the academic achievement of charter school students is whether the charter students are in some way harder to educate than their counterparts enrolled in ...

Poverty and the Economic Transition in the Russian Federation

In what some describe as one of the great natural experiments of our time, the Russian Federation has introduced a series of sweeping economic reforms over a very short period of time, beginning in January 1992. These include the elimination of most food subsidies; the reduction of other food subsidies and subsidies for fuel and most other basic commodities; the use of freely fluctuating market prices; the privatization of selected state enterprises; the creation of conditions for the establishment of a private sector in many areas of economic activity; and the initiation of a process that will ultimately transfer much property and land into private ownership. The result is rapid economic and social change. Western observers agree that this transformation will produce significant dislocations and affect many people adversely. Most expect that the worst dislocations will be in the short term, with the transformation leading to substantial long-term benefits. The Russians involved in the design and implementation of this transition, as well as Russian politicians, have been and continue to be deeply concerned about the impacts of the reforms on poverty levels.

Monitoring the economic transition in the Russian Federation and its implications for the demographic crisis--the Russian Longitudinal Monitoring Survey.

Abstract Using data from the Russia Longitudinal Monitoring Survey, we provide information regarding changes in individual and household economic indicators, as well as alcohol consumption and nutritional status in Russia during 1992–1996. During this period, there have been declines in income and expenditure, and substantial increases in the prevalence of poverty. At the same time, per capita alcohol consumption has risen significantly, as has the prevalence of obesity. We discuss the significance of these findings within the context of the current mortality crisis in Russia.

The Impact of Community-Level Variables on Individual-Level Outcomes Theoretical Results and Applications

The authors study alternative estimators of the impacts of higher level variables in multilevel models. This is important since many of the important variables in social science research are higher level factors having impacts on many lower level outcomes such as school achievement and contraceptive use. While the large sample properties of alternative estimators for these models are well known, there is little evidence about the relative performance of these estimators in the sample sizes typical in social science research. The authors attempt to fill this gap by presenting evidence about point estimation and standard error estimation for both two-and three-level models. A major conclusion of the article is that readily available commercial software can be used to obtain both reliable point estimates and coefficient standard errors in models with two or more levels as long as appropriate corrections are made for possible error correlations at the highest level.