IDEAS home Printed from
   My bibliography  Save this article

Use of panel data in applications of income dynamics


  • Seppo Laaksonen

    (Central Statistical Office, Helsinki)


By using panel data, the paper aims to (1) describe changes in the income of households and to (2) present an econometric model for explaining short-term changes in income. The data are derived from the income distribution statistics compiled by the Central Statistical Office of Finland. The panel feature has been a part of the statistics since 1982. According to the results, the income of households varies considerably from year to year. The explanatory power of the econometric model was satisfactory. The income level of the previous year turned out to be the best regressor: the panel data show that income differences level out regardless of what cross-section data may indicate. The next best regressors turned out to be changes in the socio-economic status and the composition of the household. On the basis of the results, use of panel data can be recommended for research on income and on other applications ofeconomics. In the present study, the duration of the panel was only one year, which is why the application of the data is more limited than would be the case with longer panels. Long panels, on the other hand, suffer from a reduction in data due to nonresponse and overcoverage.

Suggested Citation

  • Seppo Laaksonen, 1989. "Use of panel data in applications of income dynamics," Finnish Economic Papers, Finnish Economic Association, vol. 2(1), pages 55-64, Spring.
  • Handle: RePEc:fep:journl:v:2:y:1989:i:1:p:55-64

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. MaCurdy, Thomas E., 1982. "The use of time series processes to model the error structure of earnings in a longitudinal data analysis," Journal of Econometrics, Elsevier, vol. 18(1), pages 83-114, January.
    2. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
    3. Quigley, John M, 1987. "Interest Rate Variations, Mortgage Prepayments and Household Mobility," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 636-643, November.
    4. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Sullström, Risto & Riihelä, Marja & Tuomala, Matti, 2010. "Trends in top income shares in Finland 1966-2007," Research Reports 157, VATT Institute for Economic Research.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fep:journl:v:2:y:1989:i:1:p:55-64. 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: (Editorial Secretary). General contact details of provider: .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.