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Latent variables in econometrics

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  • J. Kmenta

Abstract

Unobservable variables in econometrics are represented in one of three ways: by variables contaminated by measurement errors, by proxy variables, or by various manifest indicators and/or causes. This paper contains a discussion of models involving each of these representations, and highlights certain interesting implications that have been insufficiently emphasized or completely unrecognized in the literature.

Suggested Citation

  • J. Kmenta, 1991. "Latent variables in econometrics," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 45(2), pages 73-84, June.
    • Handle: RePEc:bla:stanee:v:45:y:1991:i:2:p:73-84
    DOI: 10.1111/j.1467-9574.1991.tb01295.x
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    Cited by:

    1. Attar, M. Aykut & Tekin-Koru, Ayça, 2022. "Latent social distancing: Identification, causes and consequences," Economic Systems, Elsevier, vol. 46(1).
    2. Lovaglio, Pietro Giorgio, 2008. "Process of accumulation of Italian human capital," Structural Change and Economic Dynamics, Elsevier, vol. 19(4), pages 342-356, December.
    3. van der Plaat, Mark T., 2021. "How to Measure Securitization: A Structural Equation Approach," MPRA Paper 109735, University Library of Munich, Germany.
    4. Maciej Jakubowski, 2015. "Latent variables and propensity score matching: a simulation study with application to data from the Programme for International Student Assessment in Poland," Empirical Economics, Springer, vol. 48(3), pages 1287-1325, May.

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