An Ordered Generalised Extreme Value Model with Application to Alcohol Consumption in Australia

Harris, Mark; Ramful, P.; Zhao, X.

doi:10.1016/j.jhealeco.2005.04.011

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Authors

Harris, Mark

Ramful, P.

Zhao, X.

Date

2006

Type

Journal Article

Metadata

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Citation

Harris, M.N. and Ramful, P. and Zhao, X. 2006. An Ordered Generalised Extreme Value Model with Application to Alcohol Consumption in Australia. Journal of Health Economics. 25 (4): pp. 782-801.

Source Title

Journal of Health Economics

DOI

10.1016/j.jhealeco.2005.04.011

ISSN

0167-6296

Faculty

Faculty of Business and Law

School

School of Economics, Finance and Property

URI

http://hdl.handle.net/20.500.11937/81804

Collection

Curtin Research Publications

Abstract

An Ordered Generalised Extreme Value (OGEV) model by Small (1987) is proposed for application to ordered discrete choice data. Relative to conventional Ordered Probit/Logit (OP/OL) and Multinomial Logit (MNL) models, the OGEV model is flexible, is defined by random utility maximization, and allows for correlation across choices via unobservable individual characteristics according to locations of the choices in the ordering. The OGEV model is applied to unit record data from Australia to study the impacts of prices, income and demographic characteristics on levels of alcohol consumption. Model selection analysis suggests that OGEV is preferred to both OP and MNL for the application.