Journal ArticleDOI
An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Units
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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
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Spatial fixed effects and spatial dependence in a single cross-section†
TL;DR: In this paper, the authors investigate the common conjecture in applied econometric work that the inclusion of spatial fixed effects in a regression specification for a single cross-sectional data set removes spatial dependence and demonstrate analytically and by means of a series of simulation experiments how evidence of the removal of spatial autocorrelation by spatial fixed effect may be spurious when the true data generating processes (DGP) takes the form of a spatial lag or spatial error dependence.
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Bank Relationships, Business Cycles, and Financial Crises
TL;DR: In this paper, a global banking network of 7938 banking institutions from 141 countries was constructed to analyze the dynamics of formation of such relationships during 1980-2009, and they found that recessions and banking crises tend to have negative effects on the formation of new connections and that these effects are not the same for all countries or all banks.
Journal ArticleDOI
Beyond Outcomes: Measuring Procedural Utility
TL;DR: In this article, the authors proposed an economic concept of procedural utility, i.e., whether people gain procedural utility from participating in the political decision-making process itself, irrespective of the outcome.
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Now and forever? Initial and subsequent location choices of immigrants
TL;DR: In this article, the authors exploit a natural experiment to study the influence of regional factors on initial and subsequent location choices among immigrants, finding that immigrants to Sweden are attracted to regions with high representation from the individual's birth country and large overall immigrant populations.
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Do all firms benefit equally from downstream FDI? The moderating effect of local suppliers’ capabilities on productivity gains
Garrick Blalock,Daniel H. Simon +1 more
TL;DR: The authors examined how host country firms' capabilities influence their propensity to benefit from downstream foreign direct investment (FDI) and found that firms with stronger production capabilities benefit less than others, while firms with greater absorptive capacity benefit more.
References
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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.