Faculty of Economics and Business Administration Publications Database

Semiparametric Estimator for Binary‐outcome Sample Selection: Prejudice Matters in Election

Volume: 80
Pages: 536 - 553
ISSN-Print: 1468-0084
Link External Source: Online Version
Year: 2018

A semiparametric estimator for binary‐outcome sample‐selection models is proposed that imposes only single index assumptions on the selection and outcome equations without specifying the error term distribution. I adopt the idea in Lewbel (2000) using a ‘special regressor’ to transform the binary response Y so that the transformed Y becomes linear in the latent index, which then makes it possible to remove the selection correction term by differencing the transformed Y equation. There are various versions of the estimator, which perform differently trading off bias and variance. A simulation study is conducted, and then I apply the estimators to US presidential election data in 2008 and 2012 to assess the impact of racial prejudice on the elections, as a black candidate was involved for the first time ever in the US history.