Abstract
Although formal conditions for identification in the multinomial probit (MNP) model are now clearly established, little is known about how various estimable MNP specifications perform in practice. This article shows that parameter identification in the MNP model is extremely tenuous in the absence of exclusion restrictions. This previously unnoticed fact is important because formal identification of MNP models does not require exclusion restrictions, and many potential economic applications of MNP are to situations in which exclusion restrictions are not readily available. Thus, failure to be aware of the difficulties present in such situations may lead to reporting of unreliable results.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
