Consequences of Specification Error for Distributional Analysis With an Application to Intergenerational Mobility
AbstractWe analyze the consequences of three types of specification error for conditional distribution functions F (y|a): measurement error in y, measurement error in a and omitted conditioning variables. The paper uses exact results to obtain conditions under which the effect of the misspecification on the computed distribution function can be signed. The effects are shown to depend on both the curvature of the true distribution and the properties of the error distribution. The consequences of misspecification are illustrated using a model of intergenerational mobility.
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Bibliographic InfoPaper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 02/156.
Length: 42 pages
Date of creation: Nov 2002
Date of revision:
specification error; mobility; conditional distributions;
Other versions of this item:
- Donal O'Neill & Olive Sweetman & Dirk van de Gaer, 2002. "Consequences of Specification Error for Distributional Analysis with an Application to Intergenerational Mobility," Economics, Finance and Accounting Department Working Paper Series n1110102, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
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