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A dynamic factor model approach to incorporate Big Data in state space models for official statistics

Caterina Schiavoni, Franz Palm, Stephan Smeekes, Jan van den Brakel

arXiv 31 Jan 2019 · Econometrics · publishedJournal of the Royal Statistical Society Series A (Statistics in Society) (2020) · 4 citations (OpenAlex)

arXiv:1901.11355 · PDF · DOI · OpenAlex · Extracted main text

Abstract

In this paper we consider estimation of unobserved components in state space models using a dynamic factor approach to incorporate auxiliary information from high-dimensional data sources. We apply the methodology to unemployment estimation as done by Statistics Netherlands, who uses a multivariate state space model to produce monthly figures for the unemployment using series observed with the labour force survey (LFS). We extend the model by including auxiliary series of Google Trends about job-search and economic uncertainty, and claimant counts, partially observed at higher frequencies. Our factor model allows for nowcasting the variable of interest, providing reliable unemployment estimates in real-time before LFS data become available.

Citation extraction

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appendix boundary found by appendix_command · 73% 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
1Doz, C., Giannone, D., and Reichlin, L (2011) A Two-step Estimator for Large Approximate Dynamic Factor Models Based on Kalman filtering1.00064100%
2Harvey, A. and Chung, C.-H (2000) Estimating the Underlying Change in Unemployment in the UK1.00053100%
3Durbin, J. and Koopman, S. J (2012) Time Series Analysis by State Space Methods: Second Edition0.9568388%
4van den Brakel, J. A. and Krieg, S (2015) Dealing with Small Sample Sizes, Rotation Group Bias and Discontinuities in a Rotating Panel Design0.92844100%
5Bollineni-Balabay, O., van den Brakel, J., and Palm, F (2017) State Space Time Series Modelling of the Dutch Labour Force Survey: Model Selection and Mean Squared Errors Estimation0.73732100%
6Pfeffermann, D (1991) Estimation and Seasonal Adjustment of Population Means Using Data from Repeated Surveys0.64422100%
7Bailar, B (1975) The Effects of Rotation Group Bias on Estimates from Panel Surveys0.64422100%
8Bai, J (2004) Estimating Cross-section Common Stochastic Trends in Nonstationary Panel Data0.58531100%
9van den Brakel, J. and Krieg, S (2009) Estimation of the Monthly Unemployment Rate Through Structural Time Series Modelling in a Rotating Panel Design0.58531100%
10Bai, J. and Ng, S (2008) Forecasting Economic Time Series Using Targeted Predictors0.51121100%

Showing the top 10 of 39 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
1High-Dimensional Forecasting in the Presence of Unit Roots and Cointegration0.40511
2First–order integer–valued autoregressive processes with Generalized Katz innovations0.40511