Advanced Search
MyIDEAS: Login to save this paper or follow this series

FEVD: Just IV or Just Mistaken?

Contents:

Author Info

  • Trevor Breusch
  • Michael B. Ward
  • Hoa Thi Minh Nguyen
  • Tom Kompas

Abstract

Fixed effects vector decomposition (FEVD) is simply an instrumental variables (IV) estimator with a particular choice of instruments and a special case of the well-known Hausman-Taylor IV procedure. Plümper and Troeger (PT) now acknowledge this point and disown the three-stage procedure that previously defined FEVD. Their old recipe for standard errors, which has regrettably been used in dozens of published research papers, produces dramatic overconfidence in the estimates. Again PT concede the point and now adopt the standard IV formula for standard errors. Knowing that FEVD is an application of IV also has the benefit of focusing attention on the choice of instruments. Now it seems PT claim that the FEVD instruments are always the best choice, on the grounds that one cannot know whether any potential instrument is correlated with the unit effect. One could just as readily make the same specious claim about other estimators, such as ordinary least squares, and support it with similar Monte Carlo assumptions and evidence.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1093/pan/mpr012
Download Restriction: no

File URL: http://pan.oxfordjournals.org/content/19/2/165.full.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number archive-17.

as in new window
Length: 5 pages
Date of creation: 2011
Date of revision:
Publication status: Published in Political Analysis (2011) 19 (2): 165-169.
Handle: RePEc:mos:moswps:archive-17

Contact details of provider:
Postal: Department of Economics, Monash University, Victoria 3800, Australia
Phone: +61-3-9905-2493
Fax: +61-3-9905-5476
Email:
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC

Order Information:
Email:
Web: http://www.buseco.monash.edu.au/eco/research/papers/

Related research

Keywords:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Fixed-Effects Vector Decomposition
    by Dave Giles in Econometrics Beat: Dave Giles' Blog on 2012-06-12 18:36:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Farla, Kristine, 2012. "Institutions and credit," MERIT Working Papers 038, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Karpaty, Patrik & Tingvall, Patrik Gustavsson, 2011. "Offshoring and Home Country R&D," Working Paper Series in Economics and Institutions of Innovation, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies 254, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  3. Kokko, Ari & Gustavsson Tingvall, Patrik, 2012. "The Eurovision Song Contest, Preferences and European Trade," Ratio Working Papers, The Ratio Institute 183, The Ratio Institute.
  4. Arouri, Mohamed El Hedi & Caporale, Guglielmo Maria & Rault, Christophe & Sova, Robert & Sova, Anamaria, 2012. "Environmental Regulation and Competitiveness: Evidence from Romania," Ecological Economics, Elsevier, vol. 81(C), pages 130-139.
  5. Karpaty, Patrik & Gustavsson Tingvall, Patrik, 2012. "Offshoring of Services and Corruption: Do Firms Escape Corrupt Countries?," Ratio Working Papers, The Ratio Institute 192, The Ratio Institute.
  6. Markus Tepe & Pieter Vanhuysse, 2013. "Parties, Unions, and Activation Strategies: The Context-Dependent Politics of Active Labor Market Policy Spending," Discussion Papers 15, Central European Labour Studies Institute (CELSI).
  7. Heyman, Fredrik & Gustavsson Tingvall, Patrik, 2012. "The Dynamics of Offshoring and Institutions," Ratio Working Papers, The Ratio Institute 190, The Ratio Institute.
  8. Bengt Söderlund & Patrik Tingvall, 2014. "Dynamic effects of institutions on firm-level exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 150(2), pages 277-308, May.
  9. Tingvall, Patrik, 2011. "Dynamic Effects of Corruption on Offshoring," Ratio Working Papers, The Ratio Institute 182, The Ratio Institute.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mos:moswps:archive-17. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simon Angus).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.