Transitions at Different Moments in Time: A Spatial Probit Approach

J. Paul Elhorst, Pim Heijnen, Anna Samarina, Jan Jacobs

    Research output: Contribution to journalArticle

    Abstract

    This paper adopts a spatial probit approach to explain interaction effects among cross-sectional units when the dependent variable takes the form of a binary response variable and transitions from state 0 to 1 occur at different moments in time. The model has two spatially lagged variables: one for units that are still in state 0 and one for units that had already transferred to state 1. The parameters are estimated on observations for those units that are still in state 0 at the start of the different time periods, whereas observations on units after they transferred to state 1 are discarded, just as in the literature on duration modeling. Furthermore, neighboring units that had not yet transferred may have a different impact from units that had already transferred. We illustrate our approach with an empirical study of the adoption of inflation targeting for a sample of 58 countries over the period 1985-2008. Copyright
    Original languageEnglish
    Pages (from-to)422-439pp
    JournalJournal of Applied Econometrics
    Volume32
    Issue number2
    DOIs
    Publication statusPublished - 2017

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