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Identifier to cite or link to this item: https://hdl.handle.net/10086/28348

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Title
The Tempered Ordered Probit (TOP) Model with an Application to Monetary Policy
Creator
Creator Name
Greene, William H. Greene, William H.
Affiliation
Affiliation Name
New York University
Creator Name
Gillman, Max Gillman, Max
Affiliation
Affiliation Name
University of Missouri
Creator Name
Harris, Mark N. Harris, Mark N.
Affiliation
Affiliation Name
Curtin University
Creator Name
Spencer, Christopher Spencer, Christopher
Affiliation
Affiliation Name
Loughborough University
Editor
Contributor Name
Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University
Key Word
Monetary policy committee
voting
discrete data
uncertainty
tempered equations
JEL
C3
E50
Abstract
We propose a Tempered Ordered Probit (TOP) model. Our contribution lies not only in explicitly accounting for an excessive number of observations in a given choice category - as is the case in the standard literature on inflated models; rather, we introduce a new econometric model which nests the recently developed Middle Inflated Ordered Probit (MIOP) models of Bagozzi and Mukherjee (2012) and Brooks, Harris, and Spencer (2012) as a special case, and further, can be used as a specification test of the MIOP, where the implicit test is described as being one of symmetry versus asymmetry. In our application, which exploits a panel data-set containing the votes of Bank of England Monetary Policy Committee (MPC) members, we show that the TOP model affords the econometrician considerable flexibility with respect to modeling the impact of different forms of uncertainty on interest rate decisions. Our findings, we argue, reveal MPC members. asymmetric attitudes towards uncertainty and the changeability of interest rates.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2013-09
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
CEI Working Paper Series, No. 2013-04
Relation
Related Identifier
URI
  http://cei.ier.hit-u.ac.jp/English/index.html
Number of Pages
34
Appears in Collections
CEI Working Paper Series
URL
https://hdl.handle.net/10086/28348