A Latent-Variable Model of Quality Determination
- 1 January 1988
- journal article
- research article
- Published by Taylor & Francis in Journal of Business & Economic Statistics
- Vol. 6 (1) , 97-104
- https://doi.org/10.1080/07350015.1988.10509641
Abstract
Because of data difficulties, there has been little empirical work analyzing the determination of the quality of a firm's output. This article constructs a latent variable model for this problem that uses easily obtainable data. The model is developed from the relationship between the firm's input demand functions and reduced-form output functions, and it has a novel multiple indicator multiple cause (MIMIC) interpretation. The model also allows identification of an intercept, implying that an index of quality that is comparable across samples can be constructed. As an example, a latent variable model of nursing-home quality is estimated.Keywords
All Related Versions
This publication has 5 references indexed in Scilit:
- Chapter 23 Latent variable models in econometricsPublished by Elsevier ,1984
- Multivariate regression models for panel dataJournal of Econometrics, 1982
- Estimation of a Model with Multiple Indicators and Multiple Causes of a Single Latent VariableJournal of the American Statistical Association, 1975
- Hedonic Prices and Implicit Markets: Product Differentiation in Pure CompetitionJournal of Political Economy, 1974
- Structural Equation Methods in the Social SciencesEconometrica, 1972