Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-59259
Baetschmann, Gregori; Staub, Kevin E; Winkelmann, Rainer (2011). Reconsidering the analysis of longitudinal happiness data - with an application to the effect of unemployment. Working paper series / Department of Economics No. 4, University of Zurich.
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.
|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics|
Working Paper Series > Department of Economics
|JEL Classification:||C23, C25, J28, J64|
|Uncontrolled Keywords:||Ordered response, panel data, correlated heterogeneity, incidental parameters|
|Deposited On:||15 Feb 2012 13:21|
|Last Modified:||15 Nov 2012 11:47|
|Series Name:||Working paper series / Department of Economics|
|Number of Pages:||36|
|Additional Information:||Revised version|
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