Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption: The Case of American and Polish Data
The problem addressed in this article is the bias to income and expenditure elasticities estimated on pseudo-panel data caused by measurement error and unobserved heterogeneity. We gauge empirically these biases by comparing cross-sectional, pseudo-panel and true panel data from both Polish and American expenditure surveys. Our results suggest that unobserved heterogeneity imparts a downward bias to cross-section estimates of income elasticities of at-home food expenditures and an upward bias to estimates of income elasticities of away-from-home food expenditures. "Within" and first-difference estimators suffer less bias, but only if the effects of measurement error are accounted for with instrumental variables.
|Date of creation:||Apr 2005|
|Publication status:||Published in Journal of business & economic statistics, 2005, 23 (2), pp.242-253. <10.1198/073500104000000587>|
|Note:||View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00176109|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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