Microeconometrics: Methods and Applications A. Colin Cameron and Pravin K. Trivedi
MICROECONOMETRICS: Methods and Applications


Cambridge University Press, New York
May 2005


BOOK CORRECTIONS - Latest update January 7, 2008.

Changes below dated July 26, 2007 or earlier have been made in the second reprinting of the book. 

Misspellings and Punctuation errors are given separately: See Misspellings and Punctuation

Page
Date Posted
Correction or Addition
p.xiii
11/6/2006
Table of Contents Section 23.3 should be page 792  (and not 762)
p.9
11/6/2006
Eleven  lines down should be "If D is found"  (and not "d")
p.56
11/27/2009
In (3.7) left-hand side should by y_i1 with superscript 0 and not superscript 1 [George Leckie, Birstol]
p.69
11/6/2006
Last line should be "ln w"  (and not "y")
p.73
1/4/2007
Line before proposition 4.1 delete "and uncorrelated"  [Neal Beck, NYU]
p.85
2/18/2006
Bottom line should be "censored models (see Section 16.9.2)." [Jeff Smith, Michigan]
p.89
3/30/2006
Third last line should be "q = 0.1, 0.5, and 0.9" and not  "q = 0.1, 0.2, ..., 0.9 and the regression line" [James MacKinnon, Queen's]
p.101
11/6/2006
Equation (4.52) should end with (X'Z)^-1  (and not  (Z'X)^-1). [Tom Wansbeek, Groningen]
p.101
11/6/2006
Bottom line should be "see Section 6.5.4"  (and not 6.5.6)  [Raymond Guiteras, MIT]
p.103
7/26/2007
End first paragraph should be "see Section 6.5.4"  (and not 6.54,.5)  [Fernando Martel, NYU]
p.113
5/27/2005
Exercise 4-2 part (b) should be Hence directly obtain a consistent estimate of the variance of μ_hat  
(and not Hence directly obtain the variance of y_bar)
p.114
11/6/2006
Exercise 4-4 parts (c)-(e) have several typos.  See mmaex04_4.pdf. [Tomek Katzur, Groningen]
p.114
6/9/2005
Exercise 4-7 parts (d)-(f) need to be replaced. See mmaex04_7.pdf.
p.164
6/9/2005
Exercise 5-1 is correct but the function is close to linear.
A better example uses E[y|x]=exp(0+0.04x)/[1+exp(0+0.04x)].
p.165
6/9/2005
Exercise 5-7 part (c) is ML estimation (delete the word NLS).
p.168
3/3/2006
Second line after first displayed equation should be E[h(x)(y-g(x,β))] = 0 (and not E[h(x)(y-x'β)]) [Doug Miller, UC-Davis]
p.173
5/4/2007
Six lines down should be G_0 in propostion 6.1 (and not 5.1)  [Ronald Bachmann, RWI Essen]
p.178
3/3/2006
Last displayed equation. The first and third matrices are wrong and should be similar to G_hat in (6.21). For these matrices the two terms being summed over i should be x_i*x_i' and 3*utilde_i^2*x_i*x_i'. [Doug Miller, UC-Davis]
p.181
5/6/2009
OIR statistic in (6.26) should be multiplied by N.  [Elias Einio, Helsinki].
p.185
11/6/2006
Equation (6.40) at the end should have N that is not bold.
p.189
3/6/2006
Theil's interpretation. Change "suppose that in the reduced form model" to "Suppose that in a first-stage model" [Doug Miller, UC-Davis]
p.189
1/7/2008
First line after (6.49) should be "PI is a rxK matric  (and not Kxr).  [Umed Khilvatsho, Groningen]
p.190
3/6/2006
Basmann's interpretation. Change "OLS reduced form prediction" to "OLS first-stage predictions". [Doug Miller, UC-Davis]
p.193
3/6/2006
Top line change "because to regressors" to "because the regressors" [Doug Miller, UC-Davis]
p.194
11/6/2006
Line before (6.58) add "defined by" at the end of the line.
p.196
1/7/2008
First line of nonlinear 2SLS section should have N^-1 that is not bold. [Umed Khilvatsho, Groningen]
p.197
1/7/2008
Second line of last paragraph should have PI'  (and not PI) in two places.  [Umed Khilvatsho, Groningen]
p.197
11/6/2006
Last displayed equation is correct but is easier to read if z_i in the last term is moved to the beginning of the sum.
p.198
11/6/2006
Nine lines from bottom after Hence .... the "not equal to sign" should be "=".
Eight lines from bottom "= 0" should be "not equal to zero".
p.199
5/18/2005
In Table 6.4 NL2SLS column is 0.969, 0.041, 0.84 (and not 0.960, 0.046, 0.85)
p.199
11/6/2006
Third line from bottom delete "that" at the start of the line.
p.202
11/6/2006
Seven lines down should be Section 10.2.5 and not Section 16.2.5.
p.206
11/6/2006
In middle reference should be to (6.76) and not (6.26).
p.213
11/6/2006
Seven lines from bottom G^2 should be G(G-1) to allow for G normalization retrictions on B.
p.214
4/10/2007
Thirteen lines from top subscript at end of line should be lower case g. [Jens Krueger, Friedrich Schiller University, Jena]r
p.214
3/28/2006
In the displayed equation for the 3SLS estimator the matrix OMEGA_hat should be SIGMA-hat.
Same change two lines down and four lines down. SIGMA_hat = definition given for OMEGA_hat.
p.220
5/27/2005
Exercise 6-1 part (a) should be (y - exp(x'β))^2   (and not (y - (x'β))^2).
and part (d) should be E[x(y - exp(x'β))] = 0   (so add = 0) 
p.237
11/6/2006
fourth line down should be "Section 7.3.5"  (and not "3.5")
p.248
11/6/2006
At top the definition of W should have a transpose after first h_hat.
p.248
11/6/2006
Three lines above (7.46) should be Section 7.6.4  (and not 7.7.4).
p.254
11/6/2006
Eleven lines from bottom delete "in generating y,"
p.255
5/18/2005
In sections 7.8.1-7.8.3 the sample size was N=40 (and not N=30)  
p.255
5/18/2005
Five lines from bottom should be z = (0.817 - 1) / 0.376 = -0.487
p.256
5/18/2005
In section 7.8.3 the percentiles should be -1.89 and 1.80 (and not -2.62 and 1.83)
p.273
10/4/2007
Six and seven lines from bottom the upper and lower bounds for H should not  be multiplied by N   [Liz  Cascio, Dartmouth]
p.277
5/6/2008
OIR statistic in (8.39) should be divided by N.  [Elias Einio, Helsinki].
p.296
1/21/2007 three lines from bottom should be within 0.545 and not within 0.21
p.300
11/6/2006
Section 9.3.4 uses the same data as on page 206. So second paragraph should be "... using the log hourly wage data of Figure 9.1"  (and not "using using generated data, a random sample of size 100 drawn from the N[0,25^2] distribution. For the particular sample drawn the sample mean is 2.81 and the sample standard deviation is 25.27.")
p.310
4/10/2007
Equation (9.20) should have + b(x_0)  (and not - b(x_0))  [Jens Krueger, Friedrich Schiller University, Jena]
p.311
5/18/2005 firth last line should be .... for pedagogical reasons, nonkernel local regression ...  
p.335
1/21/2007
Exercise 9-4(a) delete "density" so reads "Obtain the kernel regression estimate for ..."
p.341
11/6/2006
First line of section 10.3 should be "The leading method for maximizing"  (and not "for obtaining")
p.343
4/10/2007
Three lines after (10.7) should have minus sign before E[  ] and then replace "which" by "where E[  ]" [Jens Krueger, Friedrich Schiller University, Jena]
p.352
4/10/2007
Bibliographic Notes 5.3 should be 10.3  [Jens Krueger, Friedrich Schiller University, Jena]
p.362
7/26/2007
In third paragraph in three places change sigmahat to s_thetahat  [Paul Glewwe, Minnesota]
p.364
7/26/2007
Equation (11.6) change first minus sign to +  (since t*[1-alpha/2] is usually negative)  [Paul Glewwe, Minnesota]
p.370
4/10/2007
Third line above (11.13) should by i = sqrt(-1)  (and not i = -sqrt(1))  [Jens Krueger, Friedrich Schiller University, Jena]
p.373
11/6/2006
Fifteen lines from bottom should be "Subsampling is useful"  (and not "Subsampling bootstraps are useful")
p.380
11/6/2006
Thirteen and fourteen lines from bottom only one set of parantheses is needed (use (Nh^-1 ) and not ((Nh^-1)) )
p.393
5/6/2008
Nine lines down 5^20 or 95 trillion should be 20^5 or 3 million  [Jorge Gonzalez-Chapela, Alicante]
p.398
4/10/2007
Second last line Section 12.4 should have extra parenthesis after theta in two places [Jens Krueger, Friedrich Schiller University, Jena]
p.410
4/10/2007
First line should be "quasi-random sequences"  (and not psuedo-random sequences) [Jens Krueger, Friedrich Schiller University, Jena]
p.414
5/18/2005
Figure 12.3 vertical axis label should be f(x) and kg(x) and legend should be kg(x) (and not g(x))
p.414 5/4/2011
Four lines down delete ", x = r,"
p.453
4/10/2007
Three lines from bottom should be 10,000  (and not 100,000)  [Jens Krueger, Friedrich Schiller University, Jena]
p.457
4/10/2007
Table 13.4 and the line below this table should be evidence againsty H2 (and not against H1)  [Jens Krueger, Friedrich Schiller University, Jena]
p.469
1/7/2008
Second line should be "Differentiating (14.5)"  (and not 14.4)  [Umed Khilvatsho, Groningen]
p.474
7/26/2007
In fourth last paragraph replace "specified" by "classified" in theree places
p.488
11/6/2006
Exercise 14-2 in the second line should have no x in the definition of LAMDA(z)  [Tom Wansbeek, Groningen]
p.493
2/18/2006
First two lines should be "in the probability of fishing from a beach, and an increase of 0.119, 0.080,
and 0.068, respectively, in the probability of fishing from a pier, a private boat, and a charter boat."
[Jeff Smith, Michigan]
p.495
11/27/2009
In the denominator of the last displayed equation replace subscript l with subscript k, so d_ikl and I_ikl [Christoph Braun, RWI, Essen]
p.501
1/7/2008
(15.16) on right-hand side should be bold 0  [Umed Khilvatsho, Groningen]
p.501
3/22/2006
(15.17) and two lines before (15.17) should have minus sign before the expected Hessian. [Frank Windmeijer, Bristol]
p.515
4/10/2007
Four and five lines from bottom should be C=2 or C=3  (and not c=2 or c=3)  [Jens Krueger, Friedrich Schiller University, Jena]
p.524
11/27/2006
In derivation of d2lnL/dbdb' there should be a minus sign in the last two equalities  [Tomek Katzur, Groningen]
p.526
4/10/2007
Third last equation delete the final close parenthesis.  [Jens Krueger, Friedrich Schiller University, Jena]
p.507
1/7/2008
Item 4. in the bullet list should have superscript s in the sum (and not superscript t) [Umed Khilvatsho, Groningen]
p.508
3/22/2006
Possible error in (15.31) needs to be checked
p.535
11/27/2009
Last term in displayed equation in mddole of page should be (1-d_i)ln[1 - Sum_i etc.] not (1-d_i)ln[Sum_i etc.] [Andres Ramirez Hassan, AEAFIT Univ, Columbia]
p.540
3/22/2006
Figure 16.2 and the last paragraph of page 540 use an alternative definition of the Mills ratio.
To be consistent with our preferred definition (see discussion on p.541),
we should instead use Mills ratio = E[z|z>-c] = phi(c)/PHI(c) as in equation (16.22).
This yields a Corrected Figure 16.2  and a corrected last paragraph of p.540
[Michael Boozer, Yale, and Andrew Jones, York]
p.541
11/6/2006
Line after (16.23) should be "see Section 16.10.1"  (and not "see Exercise 16-1")   [Tom Wansbeek, Groningen]
p.541
11/27/2009
In last line of (16.24) should end with [w+lamda(w)]^2} and not [w+lamda(w)]}^2  [Andres Ramirez Hassan, AEAFIT Univ, Columbia]
p.550
11/6/2006
In second line of (16.39) the last term should be E[y_2*|x,y_1*>0]  (and not E[y_2*|x,y_2*>00  [Stephanie Scholder, Bristol]
p.559
11/17/2006
In the bottom line (a displayed eqaution) the very final term should be ln p_j  (and not ln p_k)  [Elizabeth Klee, Fed Board of Governors]
p.560
11/17/2006
In the first displayed equation the very final term should be ln phat_j  (and not ln phat_k)  [Elizabeth Klee, Fed Board of Governors]
p.570
11/6/2006
Exercise 16-1 part (b) should be "all 200 observations"  (and not "all 2,000 observations")  [Tom Wansbeek, Groningen]
p.597
4/10/2007
In the first line add an extra close parenthesis at the end of the expression.  [Jens Krueger, Friedrich Schiller University, Jena]
p.598
4/10/2007
In the table change heading Duration to Time  [Jens Krueger, Friedrich Schiller University, Jena]
p.599
4/10/2007
In the table change heading Duration to Time  [Jens Krueger, Friedrich Schiller University, Jena]
p.605
11/6/2006
Fitth line should be "... RRUI and DRUI and 34 other regressors whose coefficients are not reported in Tables 17.7 and 17.8"  (and not just "... RRUI and DRUI")  [Dimitri Szerman, IPEA, Brazil].
p.644
4/10/2007
First displayed equation after (19.6) should be Δt_j in numerator (and not Δt)  [Jens Krueger, Friedrich Schiller University, Jena]
p.672
7/18/2007
In Table 20.4: LC should have mean 2.384 and sd 2.042, IDP mean 0.260 and sd 0.439, and FMDE 4.030 and 3.471 [Markus Jochmann, Universite catholique du Louvain]
p.699
11/6/2006
In (21.2) add an error u_it at the end of the right-hand side  [Tom Wansbeek, Groningen]
p.710
1/7/2008
In Table 21.2 beta should not be bold   [Umed Khilvatsho, Groningen]
p.711
4/10/2007
Seven lines from bottom should be standard error is 0.009 (and not 0.09)  [Jens Krueger, Friedrich Schiller University, Jena]
p.725
1/7/2008
In Table 21.7 beta should not be bold   [Umed Khilvatsho, Groningen]
p.733
4/10/2007
Ten lines from bottom in the within group variation definition delete term +y_bar  [Jens Krueger, Friedrich Schiller University, Jena]
p.734
1/7/2008
Third line of second paragraph beta should be bold  [Umed Khilvatsho, Groningen]
p.734
1/7/2008
(21.45) delta should be bold  [Umed Khilvatsho, Groningen]
p.735
1/5/2007
Formula (21.48) should only be used if there are no time-invariant regressors. If there are time-invariant regressors, adjustment is needed, such as using the pooled OLS estimator rather than the within estimator in (21.48).  [Tom Wansbeek, Groningen]
p.736
11/6/2006
In the first displayed equation remove the transpose operator in all three places.
p.736
11/6/2006
In (21.52) remove the transpose operator in all three places.
And replace bold W_bar by bold e times bold w_i bar transpose.
p.745
11/6/2006
In (22.5) remove the transpose on W_N   [Tom Wansbeek, Groningen]
p.749
7/26/2007
In the first line Z_i is T x Tr (and not Tr x T)  [Christoph Braun, RWI, Essen]
p.760
11/6/2006
The first displayed equation is valid in general but justification using Section 6.3.7
needs the additional assumption that E[X_i|Z_i] is a linear combination of Z_i.
Reason: In equation (6.24) we have r( ) = u_i so  E[du_i / dbeta | Z_i] = E[-X_i | Z_i]   [Tom Wansbeek, Groningen]
p.763
11/13/2006
In equation (22.32) should be t=2,...,T  (and not t=1,...,T)   [Tom Wansbeek, Groningen]
p.764
11/13/2006
Third line from bottom the intial value should be "y_i1"  (and not "y_i0)   [Tom Wansbeek, Groningen]
p.765
11/13/2006
In equation (22.34) should be t=3,...,T  (and not t=2,...,T)   [Tom Wansbeek, Groningen]
p.766
11/13/2006
In last paragraph of section 22.5.3 it is assumed that the initial value y_i0 is observed (whereas elsewhere in the section it was assumed that y_i1 was the initial value).
p.785
4/10/2007
In (23.19) f(y_it| ...) and gamma to the conditioning and g(.) should be g(alpha_i|eta)  [Jens Krueger, Friedrich Schiller University, Jena]
p.793
4/7/2005
Figure 23.1 axes labels are reversed. Vertical axis is log(patents) and horizontal axis is log(R&D)
p.795
1/9/2007
In (23.35) left-hand side should also condition on beta.    [Tom Wansbeek, Groningen]
p.796
1/9/2007
In (23.37) and (23.38) left-hand side should condition on capital bold X_i  (not x_i)
Also on pages 795/796 the ordering of conditioning variables varies.  [Tom Wansbeek, Groningen]
p.796
1/9/2007
Two lines above (23.37) should be "Section 23.4.6" and not "Section 23.4.5"   [Tom Wansbeek, Groningen]
p.796
1/9/2007
Second last paragraph should begin "First, it is not meaningful to condition on" rather than "not possible"  [Tom Wansbeek, Groningen]
p.797
1/9/2007
Line above (23.40) should be "Section 23.4.6" and not "Section 23.4.5"   [Tom Wansbeek, Groningen]
p.799
1/9/2007
In (23.43) drop the second equality and in the next equality replace Pr[y] with Pr[y, sum_t y_t = c. [Tom Wansbeek, Groningen]
p.799
4/10/2007
in last equality in the middle of the page delete the lone "+" in the denominator  [Jens Krueger, Friedrich Schiller University, Jena]
p.803
4/10/2007
In (23.49) delete the last minus sign in this expression.  [Jens Krueger, Friedrich Schiller University, Jena]
p.839
4/10/2006
Second equality for SIGMA_c^-1 should not have the inverse at the end.
p.839
4/10/2006
Formula for [I + aee']^(1/2) should finish with ee' and not Mee'.
p.843
4/10/2007
Five lines from bottom should be (23.46)  (and not (23.34))  [Jens Krueger, Friedrich Schiller University, Jena]
p.870
7/26/2007
In (25.34) change last plus sign to minus sign and in last term denominator chage 1-PHI() to PHI()  [Onur Bayar, Boston College]
p.870
7/26/2007 In (25.35) last term should be (sigma_1e - sigma_0e) and not (sigma_0e - sigma_1e)  [Onur Bayar, Boston College]
p.878
11/6/2006
Three lines from bottom should be "the fixed effect phi_i"  (and not "the fixed effect alpha")  [Oscar Jorda, UCD]
p.891
11/12/2007
In (25.77) the coefficient of D_i is just gamma (and not gamma x alpha) [Valerio Filoso, Naples]
p.895
5/26/2005
Table 25.6 footnote b drop RE74*RE75 from the list of regressors
p.895-6
10/29/2007
Standard errors in Tables 25.6 and 25.7 based on bootstrap are invalid as the bootstrap fails for matching estimates of ATET; see A. Abadie and .W. Imbens (2006), "On the Failure of the Bootstrap for Matching Estimates." Instead use the variance formulae in A. Abadie and G.W. Imbens (2006), "Large sample properties of Matching Estimators for Average Treatment Effects," Econometrica, 235-268. These can be implemented using Stata add-on nnmatch.
p.904
11/14/2006
Two lines after equation (26.9) should be "... essentially the same as (26.8)"  (and not (26.9))   [Tom Wansbeek, Groningen]
p.933
11/6/2006
In step 4 the variance should be sigma^2 times the identity matrix  (and not just sigma^2)
p.937
11/6/2006
In Table 27.4 Header should be "with 25% missing"  (and not "with 10% missing")
p.946
12/31/2006
First line after equation (A.3) should be "Amemiya (1985, p.89)"  (and not p.79)  [Yoshitaka Tsuruta, Tsukuba]. 
p.947
4/19/2006
Equation (A.6) add " = 1 " so that " Pr[lim b_N = b] = 1 " [Richard Green, UCD].
p.954
11/6/2006
Three lines from end of Section A.6.4 should be root-N(X_bar_N - mu) converges in distribution to N[0, sigma^2].
p.966
4/10/2007
Add Brown, B.W., and W.K. Newey (2002), "Generalized Method of Moments, Efficient Bootstrapping, and Improved Inference," Journal of Business and Economic Statistics, 20, 507-517.  [Jens Krueger, Friedrich Schiller University, Jena]
p.970
4/10/2007
Add to references Cragg, J.G. (1983), "More Efficient Estimation in the Presence of Heteroscedasticity of Unknown Form," Econometrica, 51, 751-63.  [Jens Krueger, Friedrich Schiller University, Jena]
p.970
4/10/2007
Add to references Davidson, R, and J.G. MacKinnon (2000), "Bootstrap tests: How many bootstraps?" Econometric Reviews, 19, 55-68.  [Jens Krueger, Friedrich Schiller University, Jena]
p.978
4/10/2007
Add to references Heckman and Vytlacil (2002).  [Jens Krueger, Friedrich Schiller University, Jena]
p.993
11/6/2006
Add to the references Smith, A.A. (1993), "Estimating Nonlinear Time-Series Models Using Simulated Vector Autoregressions", Journal of Applied Econometrics, 8, S63-S84.
p.999
3/15/2007
Add p.341 to Dorsey, R.E. entry
p.1002
3/15/2007
Add p.341 to Mayer, W.J. entry

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