Modeling dynamic preferences: a Bayesian robust dynamic latent ordered probit model
Much politico-economic research on individuals’ preferences is cross-sectional and does not model dynamic aspects of preference or attitude formation. I present a Bayesian dynamic panel model, which facilitates the analysis of repeated preferences using individual-level panel data. My model deals with three problems. First, explicitly include feedback from previous preferences taking into account that available survey measures of preferences are categorical. Second, I model individuals’ initial conditions when entering the panel as resulting from observed and unobserved individual attributes. Third, I capture unobserved individual preference heterogeneity both via standard parametric random effects and a robust alternative based on Bayesian nonparametric density estimation. I use this model to analyze the impact of income and wealth on preferences for government intervention using the British Household Panel Study from 1991 to 2007.
Volume and page numbers
21 , 314 -333
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