The second edition of this acclaimed graduate text provides a unified treatment of two methods used in contemporary econometric research, cross section and data panel methods. By focusing on assumptions that can be given behavioral content, the book maintains an appropriate level of rigor while emphasizing intuitive thinking. The analysis covers both linear and nonlinear models, including models with dynamics and/or individual heterogeneity. In addition to general estimation frameworks (particular methods of moments and maximum likelihood), specific linear and nonlinear methods are covered in detail, including probit and logit models and their multivariate, Tobit models, models for count data, censored and missing data schemes, causal (or treatment) effects, and duration analysis. Econometric Analysis of Cross Section and Panel Data was the first graduate econometrics text to focus on microeconomic data structures, allowing assumptions to be separated into population and sampling assumptions. This second edition has been substantially updated and revised. Improvements include a broader class of models for missing data problems; more detailed treatment of cluster problems, an important topic for empirical researchers; expanded discussion of "generalized instrumental variables" (GIV) estimation; new coverage (based on the author's own recent research) of inverse probability weighting; a more complete framework for estimating treatment effects with panel data, and a firmly established link between econometric approaches to nonlinear panel data and the "generalized estimating equation" literature popular in statistics and other fields. New attention is given to explaining when particular econometric methods can be applied; the goal is not only to tell readers what does work, but why certain "obvious" procedures do not. The numerous included exercises, both theoretical and computer-based, allow the reader to extend methods covered in the text and discover new insights.

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Econometric Analysis of Cross Section and Panel Data

How do computers contribute to business performance and economic growth? Even today, most people who are asked to identify the strengths of computers tend to think of computational tasks like rapidly multiplying large numbers. Computers have excelled at computation since the Mark I (1939), the first modern computer, and the ENIAC (1943), the first electronic computer without moving parts. During World War II, the U.S. government generously funded research into tools for calculating the trajectories of artillery shells. The result was the development of some of the first digital computers with remarkable capabilities for calculation—the dawn of the computer age. However, computers are not fundamentally number crunchers. They are symbol processors. The same basic technologies can be used to store, retrieve, organize, transmit, and algorithmically transform any type of information that can be digitized—numbers, text, video, music, speech, programs, and engineering drawings, to name a few. This is fortunate because most problems are not numerical problems. Ballistics, code breaking, parts of accounting, and bits and pieces of other tasks involve lots of calculation. But the everyday activities of most managers, professionals, and information workers involve other types of

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Beyond Computation: Information Technology, Organizational Transformation and Business Performance

This paper discusses firm behavior, market performance, and the public and private institutions that arise in systems markets, i.e., markets where consumers use compatible components together to generate benefits. In such markets, which include communications networks and 'hardware/software' networks, popular products are inherently more valuable. These 'network effects' can drive corporate strategies and are critical in understanding innovation in many high-technology markets. The discussion here emphasizes the dynamics of consumer adoption decisions in the presence of network effects, competition between incompatible systems, and how suppliers choose which components are compatible and which are not.

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Systems Competition and Network Effects

We investigate the hypothesis that the combination of three related innovations—1) information technology (IT), 2) complementary workplace reorganization, and 3) new products and services—constitute a significant skill-biased technical change affecting labor demand in the United States. Using detailed firm-level data, we find evidence of complementarities among all three of these innovations in factor demand and productivity regressions. In addition, firms that adopt these innovations tend to use more skilled labor. The effects of IT on labor demand are greater when IT is combined with the particular organizational investments we identify, highlighting the importance of IT-enabled organizational change.

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Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence

This pczper investigcztes irzterrelationslzi~~s of product design, orgcznization design, processes for leartlirzg and managing knowledge, arzd competitive strategy. This paper uses the principles of nearly decotnposable systems to investigate the ability of strind(irdized interfcices between components in cz product design to embed coordination of product development processes. Embedded coordination creates 'hierczrchical coordination' without the need to continually exercise authority-erzcrblirlg effective coordination of processes without the tight coupling of orgcznizationczl structures. We develop concepts of modularity in product and organization designs based orz smndcirdized component and organization interjczces. Modular product architec- tures create information structures that provide the 'glue' that holds together the loosely coupled parts of a modular orgatzizatiorz design. By fczcilitriting loose coupling, modularity can czlso reduce the cost and dyficulty of adaptive coordination, thereby incrensing the strategic flexibility of firms to respond to erzvironmentnl change. Modularity in product and organizcztion designs therefore etznbles cz new strcitegic approach to the management of knowledge based on cztz irztentionczl, carefully mcznaged loose coupling of (I firm's learning processes czt architec- tural cznd comporzent levels of product crecztiorz processes.

Modularity, flexibility, and knowledge management in product and organization design

This paper surveys the contributions that economists have made to understanding standards-setting processes and their consequences for industry structure and economic welfare. Standardization processes of four kinds are examined, namely: (1) market competition involving products embodying unsponsored standards, (2) market competition among sponsored (proprietary) standards, (3) agreements within voluntary standards-writing organizations, a18d (4) direct governmental promulgation. The major trajectories along which research has been moving are described and related to both the positive and the normative issues concerning compatibility standards that remain to be studied.

The Economics Of Compatibility Standards: An Introduction To Recent Research 1

We examine thirty years of computer industry market structure. Our analysis explains the persistence of dominant computer firms, their recent decline, and the changing success of competitive entry. It emphasizes the importance of technological competition between computer ‘platforms’, not firms. This aspect of competition has changed little over time. Two things did change. Young platforms serving newly founded segments eventually challenged established platforms across segment boundaries through a process of indirect entry. Vertically disintegrated platforms have led to divided technical leadership in important segments. The result is an industry with far more technological competition.

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Technological Competition and the Structure of the Computer Industry

How did the diffusion of the internet affect regional wage inequality? We examine the relationship between business investment in advanced internet technology and local variation in US wage growth between 1995 and 2000. We identify a puzzle. The internet is widespread, but the economic payoffs are not. Advanced internet technology is only associated with substantial wage growth in the 6 percent of counties that were already highly wealthy, educated, and populated and had IT-intensive industry. Advanced internet and wage growth appear unrelated elsewhere. Overall, advanced internet explains over half the difference in wage growth between already well-off counties and all others. (JEL J31, L86, O33, R11, R23)

The Internet and Local Wages: A Puzzle †

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Shane Greenstein

Papers

The Economics Of Compatibility Standards: An Introduction To Recent Research 1

Technological Competition and the Structure of the Computer Industry

The Internet and Local Wages: A Puzzle †

Technical Progress and Co-Invention in Computing and in the Use of Computers

How did location affect adoption of the commercial Internet? Global village vs. urban leadership