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Estimating Nonseparable Selection Models: A Functional Contraction Approach

Fan Wu, Yi Xin

arXiv 4 Nov 2024 · Econometrics

arXiv:2411.01799 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a novel method for estimating nonseparable selection models. We show that, given the selection rule and the observed selected outcome distribution, the potential outcome distribution can be characterized as the fixed point of an operator, which we prove to be a functional contraction. We propose a two-step semiparametric maximum likelihood estimator to estimate the selection model and the potential outcome distribution. The consistency and asymptotic normality of the estimator are established. Our approach performs well in Monte Carlo simulations and is applicable in a variety of empirical settings where only a selected sample of outcomes is observed. Examples include consumer demand models with only transaction prices, auctions with incomplete bid data, and Roy models with data on accepted wages.

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55
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Cosconati, M., Y. Xin, F. Wu, and Y. Jin (2025) Competing under information heterogeneity: Evidence from auto insurance1.000103100%
2Hu, Y (2008) Identification and estimation of nonlinear models with misclassification error using instrumental variables: A general solution0.8947371%
3Arellano, M. and S. Bonhomme (2017) Quantile selection models with an application to understanding changes in wage inequality0.81142100%
4D’Haultfuille, X., I. Durrmeyer, and P. Février (2019) Automobile prices in market equilibrium with unobserved price discrimination0.81142100%
5Chernozhukov, V., I. Fernández-Val, and S. Luo (2025) Distribution regression with sample selection and UK wage decomposition0.73732100%
6Crawford, G. S., N. Pavanini, and F. Schivardi (2018) Asymmetric information and imperfect competition in lending markets0.73732100%
7Goldberg, P. K (1996) Dealer price discrimination in new car purchases: Evidence from the consumer expenditure survey0.73732100%
8Sagl, S (2023) Dispersion, discrimination, and the price of your pickup0.73732100%
9Allen, J., R. Clark, B. Hickman, and E. Richert (2024) Resolving failed banks: Uncertainty, multiple bidding and auction design0.64422100%
10Athey, S. and P. A. Haile (2007) Nonparametric approaches to auctions0.64422100%

Showing the top 10 of 55 scored citations.