Consistent estimation of pseudo panels in the presence of selection bias

Jhon Mora Rodriguez and Juan Muro ()

No 2012-26, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: In the presence of selection bias, traditional estimators of pseudo panel data are inconsistent. In this paper, the authors derive the conditions under which consistence is achieved in pseudo-panel estimation and propose a simple test of selection bias. Specifically, they propose a Wald test for the null hypothesis that there is no selection bias. Under rejection of the null hypothesis, the authors can consistently estimate pseudo-panel parameters. They use cross sections and pseudo-panel regressions to test for selection bias and estimate the returns to education in Colombia. The authors corroborate the existence of selection bias and find that returns to education are around twenty percent.

Keywords: Repeated cross-section models; selectivity bias testing; human capital (search for similar items in EconPapers)
JEL-codes: C23 C52 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ecm and nep-lab
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http://www.economics-ejournal.org/economics/discussionpapers/2012-26
https://www.econstor.eu/bitstream/10419/58223/1/716110474.pdf (application/pdf)

Related works:
Journal Article: Consistent estimation in pseudo panels in the presence of selection bias (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201226

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