Author:
Plümper Thomas,Troeger Vera E.
Abstract
This article reinforces our 2007 Political Analysis publication in demonstrating that the fixed-effects vector decomposition (FEVD) procedure outperforms any other estimator in estimating models that suffer from the simultaneous presence of time-varying variables correlated with unobserved unit effects and time-invariant variables. We compare the finite-sample properties of FEVD not only to the Hausman-Taylor estimator but also to the pretest estimator and the shrinkage estimator suggested by Breusch, Ward, Nguyen and Kompas (BWNK), and Greene in this symposium. Moreover, we correct the discussion of Greene and BWNK of FEVD's asymptotic and finite-sample properties.
Publisher
Cambridge University Press (CUP)
Subject
Political Science and International Relations,Sociology and Political Science
Reference34 articles.
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2. Our definition of endogeneity is thus identical to the one BWNK employ in this symposium.
3. Plümper Thomas , and Troeger Vera E. 2010. Efficient estimation of exogenous variables in panel data with endogenous variables. Unpublished manuscript, University of Essex.
4. Designing Social Inquiry
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