Journal ArticleDOI
An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Units
Reads0
Chats0
TLDR
The authors illustrates the danger of spurious regression from this kind of misspecification, using as an example a wage regression estimated on data for individual workers that includes in the specification aggregate regressors for characteristics of geographical states.Abstract:
Many economic researchers have attempted to measure the effect of aggregate market or public policy variables on micro units by merging aggregate data with micro observations by industry, occupation, or geographical location, then using multiple regression or similar statistical models to measure the effect of the aggregate variable on the micro units. The methods are usually based upon the assumption of independent disturbances, which is typically not appropriate for data from populations with grouped structure. Incorrectly using ordinary least squares can lead to standard errors that are seriously biased downward. This note illustrates the danger of spurious regression from this kind of misspecification, using as an example a wage regression estimated on data for individual workers that includes in the specification aggregate regressors for characteristics of geographical states. Copyright 1990 by MIT Press.read more
Citations
More filters
Posted Content
Individual trust: does quality of public services matter?
TL;DR: In this article, the authors investigated how the quality of local public services influences individual's generalized trust and trust in local government using linear regressions techniques, and they found that good public services affect positively individual's social capital.
Journal ArticleDOI
Why do capital intensive companies pay higher wages
TL;DR: In this paper, the authors consider the labour union behaviour in the wage bargaining process as such an alternative to the capital-skill complementarity hypothesis and provide some tests for these hypotheses with panel data for Finnish companies.
Journal ArticleDOI
The Impact of Immigration on Wage Dynamics: Evidence from the Algerian Independence War
TL;DR: This article investigated the dynamics of wage adjustment to an exogenous increase in labor supply by exploiting the sudden and unexpected inflow of repatriates to France created by the independence of Algeria in 1962.
Journal ArticleDOI
Educational mismatch and spatial flexibility in Italian local labour markets
Giuseppe Croce,Emanuela Ghignoni +1 more
TL;DR: In this paper, the authors highlight the relevance of spatial mobility as an explanatory factor of the individual risk of job-education mismatch and investigate this causal link using individual information about daily home-to-work commuting time and choices to relocate in a different local area to get a job.
Posted Content
Explaining Africa's (Dis)Advantage
TL;DR: In this article, firm-level data for around 80 countries are used to examine formal firm performance and the key factors explaining Africa's disadvantage at the firm level are lack of infrastructure, access to finance, and political competition.
References
More filters
Book
Statistical abstract of the United States
TL;DR: The Red River of the North basin of the Philippines was considered a part of the Louisiana Purchase by the United States Department of Commerce in the 1939 Census Atlas of the United Philippines as discussed by the authors.
Journal ArticleDOI
Elements of Econometrics.
Ian Domowitz,Jan Kmenta +1 more
TL;DR: The Elements of Econometrics as mentioned in this paper is a textbook for upper-level undergraduate and master's degree courses and may usefully serve as a supplement for traditional Ph.D. courses in economics.
Book
Elements of econometrics
TL;DR: The emphasis is on simplification whenever possible, assuming the readers know college algebra and basic calculus, and Jan Kmenta explains all methods within the simplest framework, and generalizations are presented as logical extensions of simple cases.
Journal ArticleDOI
Maximum Likelihood Approaches to Variance Component Estimation and to Related Problems
TL;DR: In this paper, the authors proposed a restricted maximum likelihood (reml) approach which takes into account the loss in degrees of freedom resulting from estimating fixed effects, and developed a satisfactory asymptotic theory for estimators of variance components.
Journal ArticleDOI
Random group effects and the precision of regression estimates
TL;DR: The authors analyzes several empirical examples to investigate the applicability of random effects models and the consequences of inappropriately using ordinary least squares (OLS) estimation in the presence of random group effects.