EconBase
← All papers

The Factor-Lasso and K-Step Bootstrap Approach for Inference in High-Dimensional Economic Applications

Christian Hansen, Yuan Liao

arXiv 28 Nov 2016 · Statistics — Methodology · publishedEconometric Theory (2018) · 9 citations (OpenAlex)

arXiv:1611.09420 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We consider inference about coefficients on a small number of variables of interest in a linear panel data model with additive unobserved individual and time specific effects and a large number of additional time-varying confounding variables. We allow the number of these additional confounding variables to be larger than the sample size, and suppose that, in addition to unrestricted time and individual specific effects, these confounding variables are generated by a small number of common factors and high-dimensional weakly-dependent disturbances. We allow that both the factors and the disturbances are related to the outcome variable and other variables of interest. To make informative inference feasible, we impose that the contribution of the part of the confounding variables not captured by time specific effects, individual specific effects, or the common factors can be captured by a relatively small number of terms whose identities are unknown. Within this framework, we provide a convenient computational algorithm based on factor extraction followed by lasso regression for inference about parameters of interest and show that the resulting procedure has good asymptotic properties. We also provide a simple k-step bootstrap procedure that may be used to construct inferential statements about parameters of interest and prove its asymptotic validity. The proposed bootstrap may be of substantive independent interest outside of the present context as the proposed bootstrap may readily be adapted to other contexts involving inference after lasso variable selection and the proof of its validity requires some new technical arguments. We also provide simulation evidence about performance of our procedure and illustrate its use in two empirical applications.

Citation extraction

59
references
126
in-text mentions
59
distinct cited
8
self-citations
16,615
main-text words

appendix boundary found by appendix_command · 49% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Belloni, A., Chernozhukov, V., Hansen, C. and Kozbur, D (2015) Inference in high dimensional panel models with an application to gun control self1.000153100%
2Belloni, A., Chernozhukov, V., Fernández-Val, I. and Hansen, C (2014) Program evaluation with high-dimensional data self0.92843100%
3Ahn, S. and Horenstein, A (2013) Eigenvalue ratio test for the number of factors0.87452100%
4Belloni, A., Chernozhukov, V. and Hansen, C (2014) Inference on treatment effects after selection among high-dimensional controls self0.8558662%
5Acemoglu, D., Johnson, S. and Robinson, J. A (2001) The colonial origins of comparative development: An empirical investigation0.84611291%
6Stock, J. and Watson, M (2002) Forecasting using principal components from a large number of predictors0.84333100%
7Bai, J (2003) Inferential theory for factor models of large dimensions0.84333100%
8Andrews, D. W (2002) Higher-order improvements of a computationally attractive k-step bootstrap for extremum estimators0.81142100%
9Dezeure, R., Bühlmann, P. and Zhang, C.-H (2016) High-dimensional simultaneous inference with the bootstrap0.81142100%
10Bai, J. and Ng, S (2002) Determining the number of factors in approximate factor models0.73732100%

Showing the top 10 of 59 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1An Exact and Robust Conformal Inference Method for Counterfactual and Synthetic Controls0.51121
2Multiway Cluster Robust Double/Debiased Machine Learning0.40511
3Recent Developments on Factor Models and its Applications in Econometric Learning0.40511
42206.121520.40511
5Variable Selection in High Dimensional Linear Regressions with Parameter Instability0.40511
6High-dimensional forecasting with known knowns and known unknowns0.40511
7Bootstrap Adaptive Lasso Solution Path Unit Root Tests0.40511
8Fixed-order PCA: Theory for Overestimated Factor Models0.40511
9Factor-Augmented Machine Learning Panel Regressions0.40511
10The Macroeconomy as a Random Forest0.00011