Consistent Estimation in Pseudo Panels in the Presence of Selection Bias

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Abstract: In the presence of selection bias the traditional estimators for pseudo panel data models are inconsistent. This paper discusses a method to achieve consistency in static linear pseudo panels in the presence of selection bias and a testing procedure for sample selection bias. The authors’ approach uses a bias correction term proportional to the inverse Mills ratio with argument equal to the “normit” of a consistent estimation of the conditional probability of being observed given cohort membership. Monte Carlo analysis shows the test does not reject the null for fixed T at a 5% significance level in finite samples. As a “side effect” the authors utilize the enlarged pseudo panel to provide a GMM consistent estimation of the pseudo panel parameters under rejection of the null and apply the procedure to estimate the rate of return to education in Colombia.

Location: Deutsche Nationalbibliothek Frankfurt am Main

Extent: Online-Ressource

Language: Englisch

Bibliographic citation: Consistent Estimation in Pseudo Panels in the Presence of Selection Bias ; volume:8 ; number:1 ; year:2014 ; extent:26
Economics / Journal articles. Journal articles ; 8, Heft 1 (2014) (gesamt 26)

Creator: Rodríiuez, Jhon James Mora
Muro, Juan

DOI: 10.5018/economics-ejournal.ja.2014-43

URN: urn:nbn:de:101:1-2412130939304.392582825462

Rights: Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.

Last update: 15.08.2025, 7:31 AM CEST

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Rodríiuez, Jhon James Mora
Muro, Juan

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Consistent Estimation in Pseudo Panels in the Presence of Selection Bias

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