Title:      Estimating Interdependent Duration Models with an
Application to Government Formation and Survival

Authors:    Jude Hays, Aya Kachi

Entrydate:  2008-07-09 17:53:29

Keywords:   Government Formation, Survival, Seemingly Unrelated
Regressions, Simultaneous Equation Models, Weibull
Distributions, Copulas

Abstract:   This paper is part of a larger project in which we
develop methods for estimating the causal effects of variables
on (1) the duration of bargaining processes, broadly defined,
and (2) the survival of bargained outcomes when both are jointly
determined. There are many potential
applications in political science including, but not limited to,
the duration of war and survival of cease-fire agreements,
coalition formation and government survival, and  negotiations
over and enforcement of international agreements. Our primary
claim is that, in most cases, it is
inappropriate to estimate the effects of variables on these two
durations -- the bargaining and the outcome -- in isolation. Our
argument is motivated by game theoretic models that show
bargaining duration is correlated with the survival of bargained
outcomes because players incorporate their beliefs about the
survival of bargained outcomes into their decision-making
at the bargaining stage. To address this problem, we develop,
and examine the properties of two maximum likelihood estimators
-- a seemingly unrelated regresssions (SUR) estimator and a
limited information maximum likelihood (LIML) estimator. We use
both estimators to analyze the duration of government formation
and survival in a sample of European parliamentary democracies
over the period 1945 to 1998. We conclude that estimated effects
based on single equation models of either government formation or
survival, the predominant method of analysis in the existing
literature, are likely biased because they fail to capture
significant indirect effects generated by strategic and other
forms of interdependence that link the two durations.

http://polmeth.wustl.edu/retrieve.php?id=799

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