Comparing Estimation Strategies for Income Equations in the Presence of Panel Attrition: Empirical Results Based on the ECHP
Since attrition in the European Community Household Panel (ECHP) has cumulated to a considerable extent, there is concern that attrition biases empirical analysis. In this paper we compare the performance of four different strategies for estimating an earnings equation in the presence of panel attrition. By splitting the completely observed sample in one wave according to the response behavior of the following wave, we assess empirically the bias of an un-weighted, an inverse probability weighted, a Heckman and a matching estimator through bootstrap methods. Our findings lead us to several conclusions. First, for the example of Mincerian earnings equations, attrition is no matter of great concern when using the ECHP data. Second, the three estimation strategies, which correct for attrition based on estimated response probabilities, reduce the number of significantly biased parameters. Third, the correction strategies strongly increase the variance of the estimates through relying on estimated response probabilities and increase the relative bias. Hence, the reduction of significant biases is rather due to increased variance than due to lower biases. This result is confirmed when comparing the mean square error of the different estimation techniques. Therefore, for the estimation of income equations the uncorrected estimation based on respondents is suggested as the superior estimation strategy.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 226 (2006)
Issue (Month): 4 (August)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/jbnst|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998.
"An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics,"
Journal of Human Resources,
University of Wisconsin Press, vol. 33(2), pages 251-299.
- J. Fitzgerald & P. Gottschalk & R. Moffitt, "undated". "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," Institute for Research on Poverty Discussion Papers 1156-98, University of Wisconsin Institute for Research on Poverty.
- John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of income Dynamics," Economics Working Paper Archive 379, The Johns Hopkins University,Department of Economics.
- John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," NBER Technical Working Papers 0220, National Bureau of Economic Research, Inc.
- John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1997. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," Boston College Working Papers in Economics 394, Boston College Department of Economics.
- Lee A. Lillard & Constantijn W. A. Panis, 1998. "Panel Attrition from the Panel Study of Income Dynamics: Household Income, Marital Status, and Mortality," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 437-457.
- Mincer, Jacob, 1997. "The Production of Human Capital and the Life Cycle of Earnings: Variations on a Theme," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 26-47, January.
- Jacob Mincer, 1994. "The Production of Human Capital and the Lifecycle of Earnings: Variations on a Theme," NBER Working Papers 4838, National Bureau of Economic Research, Inc.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- Garen, John, 1984. "The Returns to Schooling: A Selectivity Bias Approach with a Continuous Choice Variable," Econometrica, Econometric Society, vol. 52(5), pages 1199-1218, September.
- Nicoletti, Cheti & Peracchi, Franco, 2002. "A cross-country comparison of survey nonparticipation in the ECHP -ISER working paper-," ISER Working Paper Series 2002-32, Institute for Social and Economic Research.
- Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
- Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:226:y:2006:i:4:p:361-384. 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: (Peter Golla)
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.