Abstract.
This paper considers the determinants of a binary indicator for the existence of functional limitations using seven waves (1991–1997) of the British Household Panel Survey (BHPS). The focal point of our analysis is the contributions of state dependence, heterogeneity and serial correlation in explaining the dynamics of health. To investigate these issues we apply static and dynamic panel probit models with flexible error structures. To estimate the models we use maximum simulated likelihood (MSL) with antithetic acceleration and implement a recently proposed test for the existence of asymptotic bias. The dynamic models show strong positive state dependence.
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Data from the British Household Panel Survey (BHPS) were supplied by the ESRC Data Archive. Neither the original collectors of the data nor the Archive bear any responsibility for the analysis or interpretations presented here. Funding was provided by the ESRC award no: R000238169-‘Simulation-based econometric approaches to investigating the interaction of lifestyle and health’. The authors would like to thank William Greene for valuable comments on an earlier draft of the paper, Roberto Leon Gonzalez for valuable programming advice, and participants at the iHEA Third International conference, York, 22–25 July 2001 and York Seminars in Health Econometrics (YSHE) for their comments.
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Contoyannis, P., Jones, A. & Rice, N. Simulation-based inference in dynamic panel probit models: An application to health. Empirical Economics 29, 49–77 (2004). https://doi.org/10.1007/s00181-003-0189-x
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DOI: https://doi.org/10.1007/s00181-003-0189-x