While measurement error in the dependent variable does not lead to bias in some well-known cases, with a binary … dependent variable the bias can be pronounced. In binary choice, Hausman, Abrevaya and Scott-Morton (1998) show that the … asymptotic bias in parametric models allowing for correlation of the errors with both observables and unobservables. Second, we …

We derive the asymptotic bias from misclassification of the dependent variable in binary choice models. Measurement … error is necessarily non-classical in this case, which leads to bias in linear and non-linear models even if only the … dependent variable is mismeasured. A Monte Carlo study and an application to food stamp receipt show that the bias formulas are …

larger class of models, is "large-T" bias correction [pioneered by Hahn and Kuersteiner (Econometrica 70(4):1639-1657, 2002 …