Economics Stack Exchange
Economics Stack Exchange

Questions tagged [applied-econometrics]

Use this tag to discuss empirical papers and issues arising when applying theoretical models to data. For theoretical econometric issues, use the `econometrics` tag

241 questions
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How accurate is duality?

In economic theory we know that with the use of some calculus, Hotellings Lemma and Sheppards lemma we can derive a given firms supply function and in term its Profit function. With data of a given firms costs, can we in fact get an accurate…
EconJohn
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15
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How much do second-hand good purchases affect first-hand demand?

For the purpose of this question, I'm only interested in relatively cheap goods (clothing, appliances, furniture, phones), not extremely substantial purchases like cars or houses. Proceeding from rational choice theory, it seems that the existence…
H Huang
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12
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4 answers

What are some good repositories for economic data

Economic data is a very broad concept. It can include discrete preference relation data-sets as well as extensive time series data. But it is important that theories are tested against data, and the earlier this happens in the development of an…
Jamzy
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10
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2 answers

Difference-in-differences in 2SLS regression

Usually when we do a difference-in-differences estimation, we do it in a OLS reduced form as follows: $$ Y_{it}=\alpha After_t+\gamma Treatment_i+\delta After*Treatment_{i,t}+X_{it}\beta+\epsilon_{i,t} $$ However, I was wondering, if the…
Wright
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8
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1 answer

How should one determine the proper number of lags in a time series regression?

I am using time series data in economic model estimation. I want determine proper lag for Error Correcting Model (ECM) model for example. I can check AIC, SC and HQ criterion for determine proper lag. But I am not sure about max lag that I must…
Huseyin
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8
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3 answers

Citing non-economics studies in an economics research paper

I am currently working on a paper in economics that has some dimensions that discuss women's social value. As is the case in developing countries a lot of economic studies do not exist whereas there are tons in Sociology. While I am not convinced by…
Lorien Nair
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8
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3 answers

Identifying assumption meaning

I am hoping to get a good explanation regarding what is meant by an identifying assumption. In many articles, under empirical strategy, authors state that: we exploit firm level variation to identify the effect we exploit industry level variation…
user508281
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8
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4 answers

Estimating CES utility (not production) function parameters

The CES utility function has the form \begin{equation} u(x_1,\dots,x_n)=\left[\sum_{i=1}^n\alpha_ix_i^\rho\right]^{1/\rho}, \end{equation} where $\alpha_i$ is the consumption share parameter and $\sigma=\frac{1}{1-\rho}$ is the elasticity of…
Herr K.
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8
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3 answers

What does it mean to make an identification assumption?

Trying to understand this problem: Suppose you had access to a dataset that follows individuals from adolescence throughout adulthood. Each year, you observe earnings, educational attainment, health, and marital status. Suppose you were …
user4207
7
votes
1 answer

Replicate Blundell and Bond (2000) results using R

I want to replicate Blundell and Bond (2000) Table III in R. I'm using the function pgmm from package plm, which (apparently) replicates the approach of Stata's xtabond2 (Roonman, 2009). The estimates I get are qualitatively similar, but not the…
antifrax
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7
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1 answer

Is there empirical evidence on usability of Cobb-Douglas production function?

I am trying to estimate a simple Cobb-Douglas production function $Y=AL^{\alpha}K^{\beta}$ on US data and get an unrealistic estimate of $\alpha$ and a high p-value for $\beta$. Structure of regression is as follows: $\frac 1 Y \frac{\mathrm…
Petr
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7
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2 answers

Cobb-Douglas production function with expenditures rather than units

I want to estimate a standard Cobb-Douglas production function of the form $ Y=AK^{\alpha}L^{\beta}$. However, I only have data on labour expenditures, not units of labour. I don't have data on the price of labour $w$ either, so I can't back out…
leecarvallo
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7
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2 answers

Using another person's guess as an IV

In Estimates of the Economic Return to Schooling from a New Sample of Twins by Orley Ashenfelter and Alan Krueger, they correct sampling error with an IV. They claim that their results imply a larger effect of education on earnings than what was…
user4207
6
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1 answer

How to evaluate whether the synthetic control is good enough

I'm using the synthetic control method to evaluate a state-level policy (using synth package in Stata). I've read the seminal ADH papers on CA tobacco & Germany reunification, but I still don't know exactly how to decide if the constructed synthetic…
deeyuan
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6
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2 answers

Are there conventions in economics for coding the distance between states?

I know there are lots of gravity models in economics that take as an input distance between countries. My understanding is distance is typically coded based on the distance between capital cities, either in $L_2$ norm or great-circle distance. Most…
BKay
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