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Predicting wages from transformed wage equations

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  • Armando Barrientos
  • Luis Firinguetti

Abstract

The log-linear specification of wage equations is commonly used in the applied economics literature. Predictions of the retransformed wage are not straightforward as the standard approach (naive estimator) produces biased predictions. Duan (1983) proposes a smearing estimator which overcomes this problem, and is easy to implement. In the paper we predict wages using these two estimators and highlight the difference in the predictions they generate.

Suggested Citation

  • Armando Barrientos & Luis Firinguetti, 1997. "Predicting wages from transformed wage equations," Applied Economics Letters, Taylor & Francis Journals, vol. 4(11), pages 709-710.
    • Handle: RePEc:taf:apeclt:v:4:y:1997:i:11:p:709-710
    DOI: 10.1080/758530654
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    Cited by:

    1. Alan S Duncan & Mark N Harris & Anthony Harris & Eugenio Zucchelli, 2013. "The Influence of Psychological Well-being, Ill Health and Health Shocks on Single Parents' Labour Supply," Bankwest Curtin Economics Centre Working Paper series WP1307, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    2. Florian Chávez-Juárez, 2018. "The effect of cash transfer programs on educational mobility," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-19, October.

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