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Decisions by the elderly regarding their living arrangements (e.g., living alone, living with children, or living in a nursing home) seem best modeled as a discrete choice problem in which the elderly view certain choices as closer substitutes than others. For example, living with children may more closely substitute for living independently than living in an institution does. Unobserved determinants of living arrangements at a point in time are, therefore, quite likely to be correlated. In thedoi:10.3386/w3343 fatcat:hpdpnne2crhatcf35mqbd5hin4