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Structural Measurement Errors in Nonseparable Models

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  • Hoderlein, Stefan
  • Winter, Joachim

Abstract

This paper considers measurement error from a new perspective. In surveys, response errors are often caused by the fact that respondents recall past events and quantities imperfectly. We explore the consequences of recall errors for such key econometric is- sues as the identification of marginal effects or economic restrictions in structural models. Our identification approach is entirely nonparametric, using Matzkin-type nonseparable models that nest a large class of potential structural models. We establish that measurement errors due to poor recall are generally likely to exhibit nonstandard behavior, in particular be nonclassical and differential, and we provide means to deal with this situation. Moreover, our findings suggest that conventional wisdom about measurement errors may be misleading in many economic applications. For instance, under certain conditions left-hand side recall errors will be problematic even in the linear model, and quantiles will be less robust than means. Finally, we apply the main concepts put forward in this paper to real world data, and find evidence that underscores the importance of focusing on individual response behavior.

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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 9192.

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Date of creation: 29 Jan 2009
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Handle: RePEc:lmu:muenec:9192

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Keywords: Measurement Error; Nonparametric; Survey Design; Nonseparable Model; Identification; Zero Homogeneity; Demand;

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  9. Hoderlein, Stefan & Winter, Joachim, 2009. "Structural Measurement Errors in Nonseparable Models," Discussion Papers in Economics 9192, University of Munich, Department of Economics.
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Citations

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Cited by:
  1. Susanne Schennach, 2012. "Measurement error in nonlinear models- a review," CeMMAP working papers CWP41/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  2. Thomas F. Crossley & Joachim K. Winter, 2014. "Asking Households about Expenditures: What Have We Learned?," NBER Chapters, in: Improving the Measurement of Consumer Expenditures National Bureau of Economic Research, Inc.
  3. Hoderlein, Stefan & Winter, Joachim, 2010. "Structural measurement errors in nonseparable models," Journal of Econometrics, Elsevier, vol. 157(2), pages 432-440, August.
  4. Susanne Schennach & Halbert White & Karim Chalak, 2007. "Local Indirect Least Squares and Average Marginal Effects in Nonseparable Structural Systems," Boston College Working Papers in Economics 680, Boston College Department of Economics, revised 26 Dec 2009.

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