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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Series: | Mathematical Problems in Engineering |
Online Access: | http://dx.doi.org/10.1155/2018/5486185 |
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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 |
work_keys_str_mv |
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