Class Analysis and Earnings Inequality: Nested and Non-Nested Comparisons of Two Class Models in Israel

Class Analysis and Earnings Inequality: Nested and Non-Nested Comparisons of Two Class Models in... This paper demonstrates how nesting and non-nesting analytical strategies provide different answers regarding the comparative utility of theoretical models. This paper demonstrates this incompatibility by testing the empirical efficacy of Goldthorpe's and Wright's class schemes in explaining earnings inequality in Israel. These models are non-nested, because while they partially overlap each other conceptually and empirically, neither can be written as a parametric restriction of the other. As they are non-nested, we cannot test each model against the other by using the conventional sociological approach to hypotheses testing. For the sake of demonstration, however, we show results obtained from the conventional Ordinary Least Squares regression models with conventional Baysian Information Coefficient statistic, serving as criterion for a decision rule. Wright's model was found to be more significant in explaining earnings variations in Israeli society. Yet when we used two models of non-nested specification tests (the Cox-Pesaran model and the J test) to examine each model's unique contribution, neither of these models were able to reject the rival hypothesis. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Quality & Quantity Springer Journals

Class Analysis and Earnings Inequality: Nested and Non-Nested Comparisons of Two Class Models in Israel

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2003 by Kluwer Academic Publishers
Subject
Social Sciences; Methodology of the Social Sciences; Social Sciences, general
ISSN
0033-5177
eISSN
1573-7845
D.O.I.
10.1023/A:1022579512016
Publisher site
See Article on Publisher Site

Abstract

This paper demonstrates how nesting and non-nesting analytical strategies provide different answers regarding the comparative utility of theoretical models. This paper demonstrates this incompatibility by testing the empirical efficacy of Goldthorpe's and Wright's class schemes in explaining earnings inequality in Israel. These models are non-nested, because while they partially overlap each other conceptually and empirically, neither can be written as a parametric restriction of the other. As they are non-nested, we cannot test each model against the other by using the conventional sociological approach to hypotheses testing. For the sake of demonstration, however, we show results obtained from the conventional Ordinary Least Squares regression models with conventional Baysian Information Coefficient statistic, serving as criterion for a decision rule. Wright's model was found to be more significant in explaining earnings variations in Israeli society. Yet when we used two models of non-nested specification tests (the Cox-Pesaran model and the J test) to examine each model's unique contribution, neither of these models were able to reject the rival hypothesis.

Journal

Quality & QuantitySpringer Journals

Published: Oct 17, 2004

References

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