Unobserved characteristics - i.e. traits that are not measured in micro-data or that are intrinsically unobservable (for example ‘ability’) — can have a similar effect. In technical terms, the share of observed state dependence that can be attributed to persistent observed and unobserved heterogeneity is referred to as spurious. The aim of econometric modelling is to provide a quantitative estimate of the extent to which observed state dependence is genuine rather than spurious. The model that is most commonly used in recent studies of benefit receipt is the dynamic random-effects probit (DREP) model. This model can be explained as follows. If p*a < 0, individual i does not receive SA: y„ = 0.