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The wages of BMI: Bayesian analysis of a skewed treatment–response model with nonparametric endogeneity
Author(s) -
Kline Brendan,
Tobias Justin L.
Publication year - 2008
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.1028
Subject(s) - endogeneity , nonparametric statistics , econometrics , bayesian probability , index (typography) , earnings , skew , confounding , economics , gibbs sampling , body mass index , wage , statistics , mathematics , computer science , medicine , labour economics , finance , telecommunications , world wide web
We generalize the specifications used in previous studies of the effect of body mass index (BMI) on earnings by allowing the potentially endogenous BMI variable to enter the log wage equation nonparametrically. We introduce a Bayesian posterior simulator for fitting our model that permits a nonparametric treatment of the endogenous BMI variable, flexibly accommodates skew in the BMI distribution, and whose implementation requires only Gibbs steps. Using data from the 1970 British Cohort Study, our results indicate the presence of nonlinearities in the relationships between BMI and log wages that differ across men and women, and also suggest the importance of unobserved confounding for our sample of males. Copyright © 2008 John Wiley & Sons, Ltd.