Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption: The Case of American and Polish Data
AbstractThe problem addressed in this article is the bias to income and expenditure elasticities estimated on pseudo-panel data caused by measurement error and unobserved heterogeneity. We gauge empirically these biases by comparing cross-sectional, pseudo-panel and true panel data from both Polish and American expenditure surveys. Our results suggest that unobserved heterogeneity imparts a downward bias to cross-section estimates of income elasticities of at-home food expenditures and an upward bias to estimates of income elasticities of away-from-home food expenditures. "Within" and first-difference estimators suffer less bias, but only if the effects of measurement error are accounted for with instrumental variables.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00176109.
Date of creation: Apr 2005
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Publication status: Published, Journal of Business & Economic Statistics, 2005, 23, 2, 242-253
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individual and grouped data; unobserved heterogeneity; AIDS model;
Other versions of this item:
- François Gardes & Greg J, Duncan & Patrice Gaubert & Christophe Starzec, 2002. "Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption : The Case of American and Polish Data," Working Papers 2002-02, Centre de Recherche en Economie et Statistique.
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