Nonparametric identification and estimation in a Roy model with common nonpecuniary returns

Journal Article (Journal Article)

We consider identification and estimation of a Roy model that includes a common nonpecuniary utility component associated with each choice alternative. This augmented Roy model has broader applications to many polychotomous choice problems in addition to occupational sorting. We develop a pair of nonparametric estimators for this model, derive asymptotics, and illustrate small-sample properties with a series of Monte Carlo experiments. We apply one of these models to migration behavior and analyze the effect of Roy sorting on observed returns to college education. Correcting for Roy sorting bias, the returns to a college degree are cut in half. This article has supplementary material online. © 2011 American Statistical Association.

Full Text

Duke Authors

Cited Authors

  • Bayer, P; Khan, S; Timmins, C

Published Date

  • April 1, 2011

Published In

Volume / Issue

  • 29 / 2

Start / End Page

  • 201 - 215

Electronic International Standard Serial Number (EISSN)

  • 1537-2707

International Standard Serial Number (ISSN)

  • 0735-0015

Digital Object Identifier (DOI)

  • 10.1198/jbes.2010.08083

Citation Source

  • Scopus