Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand

Copula is deemed to be a good approach for relaxing bivariate or multivariate distributions in econometric models. This paper combines static and dynamic copula functions with endogenous switching to study self-selection effects and interdependence between error terms. This technique, copula-based m...

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Main Authors: Jianxu Liu, Duangthip Sirikanchanarak, Songsak Sriboonchitta, Jiachun Xie
Format: Article
Language:English
Published: Hindawi Limited 2018-01-01
Series:Mathematical Problems in Engineering
Online Access:http://dx.doi.org/10.1155/2018/5486185
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spelling doaj-2fe2d42eca6a451f958f8a5cede42ac22020-11-24T23:15:18ZengHindawi LimitedMathematical Problems in Engineering1024-123X1563-51472018-01-01201810.1155/2018/54861855486185Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of ThailandJianxu Liu0Duangthip Sirikanchanarak1Songsak Sriboonchitta2Jiachun Xie3Faculty of Economics, Chiang Mai University, Chiang Mai, ThailandFaculty of Economics, Chiang Mai University, Chiang Mai, ThailandFaculty of Economics, Chiang Mai University, Chiang Mai, ThailandSchool of Statistics and Mathematics, Yunnan University of Finance and Economics, Kunming, ChinaCopula is deemed to be a good approach for relaxing bivariate or multivariate distributions in econometric models. This paper combines static and dynamic copula functions with endogenous switching to study self-selection effects and interdependence between error terms. This technique, copula-based models, is applied to analyze household consumption behavior and indebted self-selection effects in Thailand. The independent, Gaussian, Frank, Clayton, Gumbel, and Joe copula functions and the relatively rotated copula functions were employed in the empirical work. The best model was selected by the information criterion, AIC. We separated the households into four groups, indebted households, debt-free households, households with housing/land loans, and households without housing/land loans, which favors the examination of the treatment effects of indebted households or households with housing debts. The main results indicate that dynamic copula-based models offer better performance than others, such as classical endogenous switching models or all static copula-based models. Also, the I–I and the G–G models underestimate the treatment effects relative to the best models. Additionally, importantly, the traditional normal bivariate distribution or the static copula function could characterize the relationship as regards errors between household debt choice and household consumption and can lead to very misleading implications about the treatment effects.http://dx.doi.org/10.1155/2018/5486185
collection DOAJ
language English
format Article
sources DOAJ
author Jianxu Liu
Duangthip Sirikanchanarak
Songsak Sriboonchitta
Jiachun Xie
spellingShingle Jianxu Liu
Duangthip Sirikanchanarak
Songsak Sriboonchitta
Jiachun Xie
Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand
Mathematical Problems in Engineering
author_facet Jianxu Liu
Duangthip Sirikanchanarak
Songsak Sriboonchitta
Jiachun Xie
author_sort Jianxu Liu
title Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand
title_short Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand
title_full Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand
title_fullStr Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand
title_full_unstemmed Analysis of Household Consumption Behavior and Indebted Self-Selection Effects: Case Study of Thailand
title_sort analysis of household consumption behavior and indebted self-selection effects: case study of thailand
publisher Hindawi Limited
series Mathematical Problems in Engineering
issn 1024-123X
1563-5147
publishDate 2018-01-01
description Copula is deemed to be a good approach for relaxing bivariate or multivariate distributions in econometric models. This paper combines static and dynamic copula functions with endogenous switching to study self-selection effects and interdependence between error terms. This technique, copula-based models, is applied to analyze household consumption behavior and indebted self-selection effects in Thailand. The independent, Gaussian, Frank, Clayton, Gumbel, and Joe copula functions and the relatively rotated copula functions were employed in the empirical work. The best model was selected by the information criterion, AIC. We separated the households into four groups, indebted households, debt-free households, households with housing/land loans, and households without housing/land loans, which favors the examination of the treatment effects of indebted households or households with housing debts. The main results indicate that dynamic copula-based models offer better performance than others, such as classical endogenous switching models or all static copula-based models. Also, the I–I and the G–G models underestimate the treatment effects relative to the best models. Additionally, importantly, the traditional normal bivariate distribution or the static copula function could characterize the relationship as regards errors between household debt choice and household consumption and can lead to very misleading implications about the treatment effects.
url http://dx.doi.org/10.1155/2018/5486185
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AT songsaksriboonchitta analysisofhouseholdconsumptionbehaviorandindebtedselfselectioneffectscasestudyofthailand
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