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An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics

Author

Listed:
  • John Fitzgerald

    (Bowdoin College)

  • Peter Gottschalk

    (Boston College)

  • Robert Moffitt

    (Johns Hopkins University)

Abstract

By 1989 the Michigan Panel Study on Income Dynamics (PSID) had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership. We study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the estimates of several sets of regression coefficients. We provide a statistical framework for conducting tests for attrition bias that draws a sharp distinction between selection on unobservables and on observables and that shows that weighted least squares can generate consistent parameter estimates when selection is based on observables, even when they are endogenous. Our empirical analysis shows that attrition is highly selective and is concentrated among lower socioeconomic status individuals. We also show that attrition is concentrated among those with more unstable earnings, marriage, and migration histories. Nevertheless, we find that these variables explain very little of the attrition in the sample, and that the selection that occurs is moderated by regression-to-the-mean effects from selection on transitory components that fade over time. Consequently, despite the large amount of attrition, we find no strong evidence that attrition has seriously distorted the representativeness of the PSID through 1989, and considerable evidence that its cross sectional representativeness has remained roughly intact.

Suggested Citation

  • 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.
  • Handle: RePEc:boc:bocoec:394
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    References listed on IDEAS

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    More about this item

    Keywords

    traded goods prices; exports; imports; long memory;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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