What you don't see can't hurt you? Panel data analysis and the dynamics of unobservable factors

Arbeitspapier

We investigate the consequences of using time-invariant individual effects in panel data models when the unobservables are in fact time-varying. Using data from the British Offending Crime and Justice panel, we estimate a dynamic factor model of the occurrence of a range of illicit activities as outcomes of young people's development processes. This structure is then used to demonstrate that relying on the assumption of time-invariant individual effects to deal with confounding factors in a conventional dynamic panel data model is likely to lead to spurious gateway effects linking cannabis use to subsequent hard drug use.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Working Paper Series ; No. 2011-13

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Health: Government Policy; Regulation; Public Health ; Illegal Behavior and the Enforcement of Law
• Subject: Panel data ; Dynamic factor models ; Individual effects ; Illicit drugs ; Crime ; Gateway effect ; Kriminalität ; Drogenmarkt ; Panel

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hernández, Mónica ; Pudney, Stephen
• Event: Veröffentlichung
• (who): University of Essex, Institute for Social and Economic Research (ISER)
• (where): Colchester
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/65953
• Last update: 10.03.2025, 11:43 AM CET