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Disequilibrium, Self-Selection and Switching Models

Maddala, G. S. (1980) Disequilibrium, Self-Selection and Switching Models. Social Science Working Paper, 303. California Institute of Technology , Pasadena, CA. (Unpublished)

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The present paper outlines the similarities in the structure of self-selectivity models and disequilibrium models. Both these models fall under the category of switching models—with sample separation known and sample separation unknown. Curiously enough the econometric models with self-selectivity are all switching models with sample separation known, whereas the econometric models with disequilibrium are mostly formulated as switching models with unknown sample separation. The paper argues that the reasons for this are that not much attention is devoted to the reasons for the existence of disequilibrium and the models are all formulated as "rationing" models. It is suggested that many empirical applications of disequilibrium fall in the category of "trading" models and here the sample separation is known and the reasons for the existence of disequilibrium are also clear.

Item Type:Report or Paper (Working Paper)
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Additional Information:Financial support from the National Science Foundation is gratefully acknowledged. Published as Maddala, G. S. "Disequilibrium, self-selection, and switching models." Handbook of Econometrics 3 (1986): 1633-1688.
Group:Social Science Working Papers
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Series Name:Social Science Working Paper
Issue or Number:303
Record Number:CaltechAUTHORS:20171013-135515492
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82345
Deposited By: Jacquelyn Bussone
Deposited On:16 Oct 2017 18:12
Last Modified:03 Oct 2019 18:53

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