APPENDIX A
To simplify matters, let us admit that the probability of locating in a
particular site is only a function of area characteristics (yj), as in Bartik
(1985), Woodward (1992)and Levinson (1996). Replacing the j index by an
index for state, s, and for county, c, we obtain,
_ exp(αs + θ0ysc)
(9)
p'c^ PS=1 PC= 1 ”. + θy ,
where C. is the number of counties in state s. Thus, the log-likelihood
for the discrete choice problem is:
S Cs
log L = n.c log p.c .
.=1 c=1
If we compute the first order condition with respect to any one of the state
”dummy variables” we get,
Cs
n. - n p.c =0,
c=1
and thus,
exp(α.) =
ns PS=1 PC= 1 exP(αs + θ0 y sc)
n PC= 1 exP(θ0ysc)
If we now plug this back into the log-likelihood function we obtain the
21
More intriguing information
1. Gender and headship in the twenty-first century2. The name is absent
3. A Consistent Nonparametric Test for Causality in Quantile
4. GROWTH, UNEMPLOYMENT AND THE WAGE SETTING PROCESS.
5. QUEST II. A Multi-Country Business Cycle and Growth Model
6. The Demand for Specialty-Crop Insurance: Adverse Selection and Moral Hazard
7. The name is absent
8. THE CHANGING STRUCTURE OF AGRICULTURE
9. Placenta ingestion by rats enhances y- and n-opioid antinociception, but suppresses A-opioid antinociception
10. The name is absent