Formative Indicators and Effects of a Causal Model for Household Human Capital with Application |
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| Authors: | Camilo Dagum Pietro Giorgio Lovaglio |
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| Affiliation: | 1. Department of Statistics , University of Bologna , Italy;2. Department of Statistics , University of Ottawa , Canada;3. Department of Statistics , University of Milan-Bicocca , Italy |
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| Abstract: | Dagum and Slottje (2000 Dagum , C. , Slottje , D. J. ( 2000 ). A new method to estimate the level and distribution of the household human capital with applications . Journal of Structural Change and Economic Dynamics 11 : 67 – 94 .[Crossref] , [Google Scholar]) estimated household human capital (HC) as a latent variable (LV) and proposed its monetary estimation by means of an actuarial approach. This paper introduces an improved method for the estimation of household HC as an LV by means of formative and reflective indicators in agreement with the accepted economic definition of HC. The monetary value of HC is used in a recursive causal model to obtain short- and long-term multipliers that measure the direct and total effects of the variables that determine household HC. The new method is applied to estimate US household HC for year 2004. |
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| Keywords: | Formative and reflective indicators Latent variable Short-term and long-term multipliers U.S. household human capital distribution |
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