A Binary Choice Model with Sample Selection and Covariate-Related Misclassification

Misclassification of a binary response variable and nonrandom sample selection are data issues frequently encountered by empirical researchers. For cases in which both feature simultaneously set, we formulate model for misclassified outcome the conditional probabilities misclassification allowed to depend on covariates. Assuming availability validation data, pseudo-maximum likelihood technique can be used estimate model. The performance estimator accounting is compared that estimators offering partial corrections. An example illustrates proposed framework.