Reconsidering the analysis of longitudinal happiness data - with an application to the effect of unemployment
The paper reconsiders existing estimators for the panel data fixed effects ordered logit model, including one that has not been used in econometric studies before, and studies the small sample properties of these estimators in a series of Monte Carlo simulations. There are two main findings. First, we show that some of the estimators used in the literature are inconsistent. Second, the new estimator seems to be more immune to small sample bias than other consistent estimators and is easy to implement. The empirical relevance is illustrated in an application to the effect of unemployment on happiness. Choosing the right estimator avoids a bias of up to 30 percent in key parameters.
|Date of creation:||Jan 2011|
|Date of revision:||Jun 2011|
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- Booth, Alison L. & van Ours, Jan C., 2007.
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"A Panel Data Model for Subjective Information on Household Income Growth,"
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- Paul Frijters, 2005.
"The causal effect of income on health: Evidence from German reunification,"
Paul Frijters Discussion Papers
2005-2, School of Economics and Finance, Queensland University of Technology.
- Frijters, Paul & Haisken-DeNew, John P. & Shields, Michael A., 2005. "The causal effect of income on health: Evidence from German reunification," Journal of Health Economics, Elsevier, vol. 24(5), pages 997-1017, September.
- Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
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- Anna Cristina D'Addio & Tor Eriksson & Paul Frijters, 2007.
"An analysis of the determinants of job satisfaction when individuals' baseline satisfaction levels may differ,"
Taylor & Francis Journals, vol. 39(19), pages 2413-2423.
- Anna Cristina D’Addio & Tor Eriksson & Paul Frijters, 2003. "An Analysis of the Determinants of Job Satisfaction when Individuals’ Baseline Satisfaction Levels May Differ," CAM Working Papers 2003-16, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
- Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Investigating the Patterns and Determinants of Life Satisfaction in Germany Following Reunification," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
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