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Nonlinear Models of Measurement Errors

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  • Xiaohong Chen
  • Han Hong
  • Denis Nekipelov
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    Abstract

    Measurement errors in economic data are pervasive and nontrivial in size. The presence of measurement errors causes biased and inconsistent parameter estimates and leads to erroneous conclusions to various degrees in economic analysis. While linear errors-in-variables models are usually handled with well-known instrumental variable methods, this article provides an overview of recent research papers that derive estimation methods that provide consistent estimates for nonlinear models with measurement errors. We review models with both classical and nonclassical measurement errors, and with misclassification of discrete variables. For each of the methods surveyed, we describe the key ideas for identification and estimation, and discuss its application whenever it is currently available. (JEL C20, C26, C50)

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    Bibliographic Info

    Article provided by American Economic Association in its journal Journal of Economic Literature.

    Volume (Year): 49 (2011)
    Issue (Month): 4 (December)
    Pages: 901-37

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    Handle: RePEc:aea:jeclit:v:49:y:2011:i:4:p:901-37

    Note: DOI: 10.1257/jel.49.4.901
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    Cited by:
    1. Battistin, Erich & Chesher, Andrew, 2014. "Treatment effect estimation with covariate measurement error," Journal of Econometrics, Elsevier, Elsevier, vol. 178(2), pages 707-715.
    2. Nicolas R. Ziebarth, 2009. "Long-Term Absenteeism and Moral Hazard: Evidence from a Natural Experiment," SOEPpapers on Multidisciplinary Panel Data Research 172, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. repec:siu:wpaper:35-2012 is not listed on IDEAS
    4. Kambayashi, Ryo & Kawaguchi, Daiji & Yamada, Ken, 2013. "Minimum wage in a deflationary economy: The Japanese experience, 1994–2003," Labour Economics, Elsevier, Elsevier, vol. 24(C), pages 264-276.
    5. Michele De Nadai & Arthur Lewbel, 2012. "Nonparametric Errors in Variables Models with Measurement Errors on both sides of the Equation," Boston College Working Papers in Economics, Boston College Department of Economics 790, Boston College Department of Economics, revised 01 Jul 2013.
    6. Nicolas R. Ziebarth & Maike Schmitt & Martin Karlsson, 2014. "The Short-Term Population Health Effects of Weather and Pollution: Implications of Climate Change," SOEPpapers on Multidisciplinary Panel Data Research 646, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Hjertstrand, Per, 2013. "A Simple Method to Account for Measurement Errors in Revealed Preference Tests," Working Paper Series, Research Institute of Industrial Economics 990, Research Institute of Industrial Economics.
    8. Kaspar Wüthrich, 2013. "Set Identification of Generalized Linear Predictors in the Presence of Non-Classical Measurement Errors," Diskussionsschriften, Universitaet Bern, Departement Volkswirtschaft dp1304, Universitaet Bern, Departement Volkswirtschaft.

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