Showing papers on "Panel data published in 1988"
TL;DR: In this paper, the authors examine the importance of a financing hierarchy created by capital-market imperfections and find that investment is more sensitive to cash flow for the group of firms that are most likely to face external finance constraints.
Abstract: Most empirical models of investment rely on the assumption that firms are able to respond to prices set in centralized securities markets (through the "cost of capital" or "q"). An alternative approach emphasizes the importance of cash flow as a determinant of investment spending, because of a "financing hierarchy," in which internal finance has important cost advantages over external finance. We build on recent research concerning imperfections in markets for equity and debt. This work suggests that some firms do not have sufficient access to external capital markets to enable them to respond to changes in the cost of capital, asset prices, or tax-based investment incentives. To the extent that firms are constrained in their ability to raise funds externally, investment spending may be sensitive to the availability of internal finance. That is, investment may display "excess sensitivity" to movements in cash flow. In this paper, we work within the q theory of investment, and examine the importance of a financing hierarchy created by capital-market imperfections. Using panel data on individual manufacturing firms, we compare the investment behavior of rapidly growing firms that exhaust all of their internal finance with that of mature firms paying dividends. We find that q values remain very high for significant periods of time for firms paying no dividends, relative to those for mature firms. We also find that investment is more sensitive to cash flow for the group of firms that our model implies is most likely to face external finance constraints. These results are consistent with the augmented model we propose, which takes into account different financing regimes for different groups of firms. Some extensions and implications for public policy are discussed at the end.
4,123 citations
TL;DR: In this article, the authors consider estimation and testing of vector autoregressio n coefficients in panel data, and apply the techniques to analyze the dynamic relationships between wages an d hours worked in two samples of American males.
Abstract: This paper considers estimation and testing of vector autoregressio n coefficients in panel data, and applies the techniques to analyze the dynamic relationships between wages an d hours worked in two samples of American males. The model allows for nonstationary individual effects and is estimated by applying instrumental variables to the quasi-differenced autoregressive equations. The empirical results suggest the absence of lagged hours in the wage forecasting equation. The results also show that lagged hours is important in the hours equation. Copyright 1988 by The Econometric Society.
3,736 citations
TL;DR: In this article, a stochastic frontier production function is defined for panel data on sample firms, such that the disturbances associated with observations for a given firm involve the differences between traditional symmetric random errors and a non-negative random variable, which is associated with the technical efficiency of the firm.
1,925 citations
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TL;DR: In this paper, the panel data of bi-weekly surveys, conducted by the Japan Center for International Finance, on the yen/dollar exchange rate expectations of forty-four institutions for two years was analyzed.
Abstract: This paper analyzes the panel data of bi-weekly surveys, conducted by the Japan Center for International Finance, on the yen/dollar exchange rate expectations of forty-four institutions for two years. There are three major findings in this paper. First, market participants are found to be heterogeneous. There are significant "individual effects" in their expectation formation. Second, many institutions are found to violate the rational expectation hypothesis. Third, forecasts with long horizons showed less yen appreciation than those with short horizons. Cross-equation constraints implied by the consistencyof the forecast term structure are strongly rejected in the data.
336 citations
TL;DR: This article proposed an efficient instrumental variables estimator for panel data regression models where the individual effects may be correlated with some of the regressors, but the efficiency gains are limited to the coefficients of time-invariant endogenous variables.
Abstract: Hausman and Taylor (1981) proposed an efficient instrumental variables estimator for panel data regression models where the individual effects may be correlated with some of the regressors. Amemiya and MacCurdy (1986) and Breusch, Mizon, and Schmidt (1986) have suggested instrumental variables estimators that are potentially more efficient than the Hausman and Taylor estimator. We address the empirical question of how large these efficiency gains might be. In our returns to schooling example noticeable efficiency gains are limited to the coefficients of time-invariant endogenous variables. This is important, however, since education does not vary over time in our sample.
135 citations
TL;DR: In this paper, the authors provided the first econometric estimates of the effect of worker participation in decision-making, ownership and profits on productive efficiency in U.S. manufacturing establishments.
109 citations
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TL;DR: This paper examined the determinants of the number and quality of outside applicants for federal job openings using a variety of time-series, cross-sectional and panel data sets and found that the application rate for government jobs increases as the ratio of federal to private sector earnings increases.
Abstract: This paper examines the determinants of the number and quality of outside applicants for federal job openings using a variety of time-series, cross-sectional and panel data sets. The main finding is that the application rate for government jobs increases as the ratio of federal to private sector earnings Increases, but does not appear to be related to the relative level of fringe benefits. Furthermore, an Increase in the federal-private sector earnings differential is associated with an increase in the average quality of applicants for federal jobs. The paper discusses the implications of these findings for wage determination and recruitment in the federal government.
100 citations
TL;DR: In this article, the authors compared lifecycle data from a retrospective marital history with those derived for the same individuals from panel information, utilizing data from the Young Women's cohort of the National Longitudinal Survey of Work Experience (NLS), which was initiated in 1968.
Abstract: This paper compares lifecycle data from a retrospective marital history with those derived for the same individuals from panel information, utilizing data from the Young Women's cohort of the National Longitudinal Survey of Work Experience (NLS) which was initiated in 1968. The results indicate that when a marital event is reported in both sources there is substantial agreement about the date of the event. The errors are systematic and seem to relate to factors that increase the difficulty of recall in retrospective histories. The two data sources seem to do equally well in estimating hazard rate models of first marriage and give qualitatively similar results for hazard rate models of divorce and remarriage.
95 citations
TL;DR: This article examined the determinants of the number and quality of outside applicants for federal job openings, using a variety of time-series, cross-sectional, and panel data sets, finding that the application rate for government jobs increases as the ratio of federal to private sector earnings increases, but the rate does not appear to be related to the relative level of fringe benefits.
Abstract: This paper examines the determinants of the number and quality of outside applicants for federal job openings, using a variety of time-series, cross-sectional, and panel data sets. The main finding is that the application rate for government jobs increases as the ratio of federal to private sector earnings increases, but the rate does not appear to be related to the relative level of fringe benefits. Furthermore, an increase in the federal-private sector earnings differential is associated with an increase in the average quality of applicants for federal jobs. The author discusses the implications of these findings for wage determination and recruitment in the federal government.
90 citations
TL;DR: In this paper, the authors investigated the household saving behavior in China during the past thirty years by using econometric models, and the urban and the rural sectors were investigated separately: the time-varying-parameter technique is applied to urban time-series data, and panel data are used for estimation of the rural sector.
Abstract: Household saving behavior in China during the past thirty years is studied by using econometric models. The urban sector and the rural sector are investigated separately: the time-varying-parameter technique is applied to urban time-series data, and panel data are used for estimation of the rural sector. The estimated results of the models are robust and in line with those of similar studies of other countries.
75 citations
DOI•
01 Jan 1988
TL;DR: In this article, the authors investigated the household saving behavior in China during the past thirty years by using econometric models, and the urban and the rural sectors were investigated separately: the time-varying-parameter technique is applied to urban time-series data, and panel data are used for estimation of the rural sector.
Abstract: Household saving behavior in China during the past thirty years is studied by using econometric models. The urban sector and the rural sector are investigated separately: the time-varying-parameter technique is applied to urban time-series data, and panel data are used for estimation of the rural sector. The estimated results of the models are robust and in line with those of similar studies of other countries.
TL;DR: In this paper, the authors considered specification and estimation of technical and allocative inefficiency in a cost-minimizing framework using panel data, where the functional form of the production technology is flexible enough to allow elasticity to vary across firms, and allocating inefficiency, coming from managerial errors ou t of inertia, ignorance, etc., are separated from random errors in optimization.
Abstract: In this paper, the author considers specification and estimation of technical and allocative inefficiency in a cost-minimizing framework using panel data. Some distinguishing features of the model are (1) the functional form of the production technology is flexible enough to allow elasticity to vary across firms; (2) allocative inefficiency, coming from managerial errors ou t of inertia , ignorance, etc., are separated from random errors in optimization; (3) the panel nature of the data allows the estimation of input and firm specific allocative inefficiency together with technical inefficiency; and (4) subdivision of the sample period allows one to make efficiency comparisons of each firm over the subperiods and to check the stability of the parameter estimates. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
TL;DR: In this article, the authors used level data from the U.S. steel industry to test and find support for the hypothesis that firms in a contracting industry first disinvest from, and then close, their high-cost plants.
Abstract: Using level data from the U.S. steel industry, this paper tests and finds support for the hypothesis that firms in a contracting industr y first disinvest from, and then close, their high-cost plants. An investment decision model is estimated using a panel data set composed of the major replacement investments made in forty-three steel plants during the years 1960-81. The results indicate that the firms disinvested from those plants are least likely to remain profitable in an environment of strong competition from imports, minimills, and stagnating domestic demand. Copyright 1988 by MIT Press.
TL;DR: This article explored the problem empirically with data from the 1963 Glock-Stark Northern California Church Member Study and discussed alternative indicators of religiosity for cross-sectional analysis, and the need for appropriate panel data.
Abstract: When studies of religion's effect on fertility seek to discriminate between nominal and committed followers, they often turn to measures of participation in church activities. Such an approach is conceptually defensible but empirically problematic with the typical cross-sectional data set, because the temporal ordering is wrong: such studies usually ascertain religious participation at the time of the interview, after the birth of children. I explore the problem empirically with data from the 1963 Glock-Stark Northern California Church Member Study. Finally, I discuss alternative indicators of religiosity for cross-sectional analysis, and the need for appropriate panel data.
TL;DR: In this article, a detailed panel data set of large manufacturing firms was used to examine the proposition that pension assets and liabilities are effectively part of firms' balance sheets and found that firms with poor profitability and underfunded pensions undervalue their pension liabilities relative to revaluations based on a common discount rate.
Abstract: The proposition that pension assets and liabilities are effectively part of firms' balance sheets is examined using a detailed panel data set of large manufacturing firms. Firms with poor profitability and with underfunded pensions are found to undervalue their pension liabilities relative to revaluations based on a common discount rate. Moreover, firms are found to fund their pensions in a way that takes into account the values of the pension tax shield and "pension put." These findings indicate that pensions are not managed in a disinterested way, solely on behalf of their beneficiaries, and that the Pension Benefit Guaranty Corporation is exposed to adverse selection.
TL;DR: In this article, the authors proposed a method to estimate gross flows in labor-force participation using data from the Current Population Survey and the Canadian Labour Force Survey using maximum likelihood estimation, which is appropriate for the analysis of categorical data.
Abstract: Many large-scale sample surveys use panel designs under which sampled individuals are interviewed several times before being dropped from the sample. The longitudinal data bases available from such surveys could be used to provide estimates of gross change over time. One problem in using these data to estimate gross change is how to handle the period-to-period nonresponse. This nonresponse is typically nonrandom and, furthermore, may be nonignorable in that it cannot be accounted for by other observed quantities in the data. Under the models proposed in this article, which are appropriate for the analysis of categorical data, the probability of nonresponse may be taken to be a function of the missing variable of interest. The proposed models are fit using maximum likelihood estimation. As an example, the method is applied to the problem of estimating gross flows in labor-force participation using data from the Current Population Survey and the Canadian Labour Force Survey.
01 Jun 1988
TL;DR: Choice Map is a model for inferring a product-market map from consumer panel data that combines the rationale of random utility models, the parsimony of stochastic brand choice models, and the ability of multidimensional scaling procedures to simultaneously infer brand positions and consumer preferences for attributes from preference (choice) data.
Abstract: A recent paper (see Elrod (1987)) introduced Choice Map, a model for inferring a product-market map from consumer panel data. Choice Map combines the rationale of random utility models, the parsimony of stochastic brand choice models, and the ability of multidimensional scaling procedures to simultaneously infer brand positions and consumer preferences for attributes from preference (choice) data. In its initial formulation, Choice Map represented consumers by vectors in one or two dimensions.
Journal Article•
TL;DR: In this article, three panel data sets were used to investigate the incidence of, and factors affecting reductions in car ownership levels, and the main conclusions of the work included: (1) a substantial proportion of households with high levels of car ownership are likely to reduce their car ownership at some point during the household cycle; (2) car reducers are likely first to have built up a higher than average public transport use; and (3) car reductions are influenced by household size, income, age and employment status.
Abstract: Three panel data sets were used to investigate the incidence of, and factors affecting reductions in car ownership levels. The data used were derived from four surveys carried out in Greater Manchester between 1986 and 1987, seven surveys carried out in the Netherlands between 1984 and 1987, and three household surveys in South Yorkshire between 1987 and 1986. The main conclusions of the work included: (1) a substantial proportion of households with high levels of car ownership are likely to reduce their levels of car ownership at some point during the household cycle; (2) car reducers are likely first to have built up a higher than average public transport use; (3) the incidence of car reductions is influenced by household size, income, age and employment status.
31 Dec 1988
TL;DR: This article analyzed criminal behavior of a cohort sample of young men over an eight year period using random effects probit and Tobit techniques and found that working and going to school significantly decrease the probability of committing criminal acts and by virtually identical amounts.
Abstract: In this paper we analyze criminal behavior of a cohort sample of young men over an eight year period using random effects probit and Tobit techniques. Our major advances relate to our careful conceptualization general deterrence, and our data. As far as we are aware, this work represents the first time that a richly specified model of criminal activity has been estimated using panel data for a general population group. We find very robust evidence for a general deterrent effect emanating from police resources. Our results regarding general deterrence are open to fewer questions than previous findings. We also find that working and going to school significantly decrease the probability of commmitting criminal acts and by virtually identical amounts. This similarity of effect when coupled with other findings suggests that crime does not serve mainly as a direct source of income and that incentive effects emanating from higher wages are not very strong. There is little empirical support for the crime as work' model that has dominated economic thought regarding crime over the last two decades. More fruitful models of work and crime may result if work is conceived as having its primary effects either through preferences or through information.
Posted Content•
TL;DR: In this article, the determinants of the number and quality of outside applicants for federal job openings using a variety of time-series, cross-sectional and panel data sets were examined.
Abstract: This paper examines the determinants of the number and quality of outside applicants for federal job openings using a variety of time-series, cross-sectional and panel data sets The main finding is that the application rate for government jobs increases as the ratio of federal to private sector earnings Increases, but does not appear to be related to the relative level of fringe benefits Furthermore, an Increase in the federal-private sector earnings differential is associated with an increase in the average quality of applicants for federal jobs The paper discusses the implications of these findings for wage determination and recruitment in the federal government
Posted Content•
TL;DR: This article used pooled panel data for 1970-1981 from the Panel Study of Income Dynamics to estimate preference parameters and study the interaction between housing and labor supply, treating housing as quasi-fixed during resilience spells.
Abstract: We use pooled panel data for 1970-1981 from the Panel Study of Income Dynamics to estimate preference parameters and study the interaction between housing and labor supply. We treat housing as quasi-fixed during resi dence spells. The data pertaining to households with positive net worth give a much better fit than those with negative, for a system in first-differences of nonhous ing expenditure and the share of leisure. Good results are obtained for single equation estimations for the share of leisure.
01 Jan 1988
TL;DR: In this paper, the authors present a general overview of the type of analysis carried out, with particular attention being paid to: (a) analysis of problems arising from characteristic features of the sampling techniques used and the nature of the data collected; (b) description of changes that have taken place in travel behaviour and the respective differences found between specific sections of the populations; (c) the development of travel patterns and the changes in personal and household circumstances in relation to external factors such as fares policy and fuel prices; (d) a number of aspects of specific relevance to policy makers;
Abstract: Six batches of data have been collected in connection with a longitudinal travel study that has been carried out in the Netherlands since March 1984. This research has two main objectives: (1) to record and analyze changes in travel patterns of the Dutch population; (2) to determine the impact of changes in the fare structure on travel behaviour by separating out these effects from those of other influences, and to assess the impact of such changes on individual segments of the population. The aim of the present paper is to present a general overview of the type of analysis carried out, with particular attention being paid to: (a) analysis of problems arising from characteristic features of the sampling techniques used and the nature of the data collected; (b) description of changes that have taken place in travel behaviour and the respective differences found between specific sections of the populations; (c) the development of travel patterns and the changes in personal and household circumstances in relation to external factors such as fares policy and fuel prices; (d) a number of aspects of specific relevance to policy makers; and (e) some topics of methodological interest. For the covering abstract of the conference see IRRD 818179.
TL;DR: In this paper, a dynamic model of corporate balance sheet structures and net worth growth is fit to firm-level panel data from Uruguay and the results imply that rapid changes in the exchange rate have large effects on corporate sector leverage and liquidity.
Abstract: A dynamic model of corporate balance sheet structures and net worth growth is fit to firm-level panel data from Uruguay. Basic findings are: (1) net income is very sensitive to financial costs and demand for output; (2) there is a direct proportionality between net income and net worth expansion; (3) firms absorb most short-run fluctuations in net worth via adjustments in assets, not debts; and (4) the interest elasticity of corporate demand for peso debt is very small. Inter alia, these results imply that rapid changes in the exchange rate have large effects on corporate sector leverage and liquidity. Copyright 1988 by MIT Press.
Posted Content•
TL;DR: The authors analyzed criminal behavior of a cohort sample of young men over an eight year period using random effects probit and Tobit techniques and found that working and going to school significantly decrease the probability of committing criminal acts and by virtually identical amounts.
Abstract: In this paper we analyze criminal behavior of a cohort sample of young men over an eight year period using random effects probit and Tobit techniques. Our major advances relate to our careful conceptualization general deterrence, and our data. As far as we are aware, this work represents the first time that a richly specified model of criminal activity has been estimated using panel data for a general population group. We find very robust evidence for a general deterrent effect emanating from police resources. Our results regarding general deterrence are open to fewer questions than previous findings. We also find that working and going to school significantly decrease the probability of commmitting criminal acts and by virtually identical amounts. This similarity of effect when coupled with other findings suggests that crime does not serve mainly as a direct source of income and that incentive effects emanating from higher wages are not very strong. There is little empirical support for the crime as work' model that has dominated economic thought regarding crime over the last two decades. More fruitful models of work and crime may result if work is conceived as having its primary effects either through preferences or through information.
Posted Content•
01 Jan 1988
TL;DR: In this paper, the authors used panel data to investigate what happens when people have some important transitions or change in their life cycle, employment status, income, or car ownership, and found that car ownership changes are substantially less than expected; and public transport does not benefit as much as expected when people become members of specific dependent or 'captive' groups.
Abstract: Panel data are used to investigate what happens when people have some important transitions or change in their life-cycle, employment status, income, or car ownership. Only two years data are available, and the pace of transitions is slow: as a result relevant sample sizes are rather small. It is found that in many cases the effects on mobility are different from what would be expected from cross-section data. In particular: (a) car ownership changes are substantially less than expected; and (b) public transport does not benefit as much as expected when people become members of specific dependent or 'captive' groups. These results indicate that the effects of income growth on car ownership and therefore on public transport may not be as drastic as feared. But on the other hand it may be more difficult for public transport to secure a captive base market than hoped. Both results suggest that policy and marketing strategies may be decisive. The public transport market in two weeks over two years consists of approximately equal proportions of loyal, lost, and new people. There is a slight tendency for the loyal passengers to be those who have not had major transitions in their families, but it is easier to attract new passengers from those who have had such transitions.(a) for the covering abstract of the conference see IRRD 818179.
01 Jan 1988
TL;DR: In this paper, the authors focus on activity patterns and household interactions in complex travel decisions, and develop improved models for applied use in a variety of planning and policy evaluation contexts, but do not focus on those aspects of travel behavior that have attracted the vast majority of researchers' attention in the past.
Abstract: This paper is written from the perspective of researchers engaging in attempts to explain travel decision-making behavior. The research project outlined in the paper has only just begun. It has become clear in the initial stages of the project that the panel will provide a data set for theory development and model testing that is unmatched by any other data set on travel behavior known to exist. The research underway is basic, as it is not applied to specific questions concerning the influences of past events or forecasts of the effects of specific future events or trends. However, the aim is to develop improved models for applied use in a variety of planning and policy evaluation contexts. The model development will purposely not focus on those aspects of travel behavior that have attracted the vast majority of researchers' attention in the past: mode choice for fixed trips (particularly for single-purpose journeys to work), route choice for fixed origins and destinations, destination choice for a fixed single purpose, and trip generation. Rather, focus is on activity patterns and household interactions in complex travel decisions.(a) for the covering abstract of the conference see IRRD 818179.
01 Jan 1988
TL;DR: This chapter considers models for which observations are available in two dimensions, typically, one dimension pertains to space and the other to time, although other combinations, such as cross-sections of cross-section and time series of time series can be encompassed as well.
Abstract: Up to this point in the book, the empirical context for the various estimators and tests has been limited to a purely cross—sectional situation. In this chapter, I consider models for which observations are available in two dimensions. Typically, one dimension pertains to space and the other to time, although other combinations, such as cross-sections of cross-sections and time series of time series can be encompassed as well. This situation has become increasingly relevant in a wide range of empirical contexts. It is referred to in the literature as panel data, longitudinal data, or pooled cross-section and time series data.
Posted Content•
01 Jan 1988
TL;DR: In this paper, a sample of small and medium sized firms was used to investigate the relationship between wages and employment, revealing a stable cross-section correlation between wages, consistent with the neoclassical demand for labour theOly in general and the Cobb-Douglas assumptions in particular.
Abstract: Using a sample of small and medium sized firms, we investigate the relationship between wages and employment. Our data reveal a stable cross-section correlation between wages and productivity, consistent with the neoclassical demand for labour theOly in general and the Cobb-Douglas assumptions in particular. These results do not indicate anything about the direction of causation. A positive correlation between wages and productivity can arise from capital- labour substitution as wages change but other explanations are also plausible. Intervening variables are for example a particular concern in the analysis of panel data. In this paper, the neoclassical theOlY is tested in the generalized random effects framework put forward by Chamberlain. A series of exogeneity tests gives some support to the neoclassical notion that at the micro level, wages affect employment and productivity but not vice versa. The evidence presented is rather weak, however, and our data do flot reject a restriction to a purely static relationship. In this specification. parameter estimates are not neoclassical. The wage-elasticity estimates obtained from the neoclassical cost-minimization model are of order 0.2-0.4, which is quite reasonable. Qur results give support to the hypothesis that measurement errors have biased some of the earlier elasticity estimates from panel data towards 1.