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Fixed Effects Binary Choice Models: Estimation and Inference with Long Panels

Daniel Czarnowske, Amrei Stammann

arXiv 8 Apr 2019 · Econometrics · 2 citations (OpenAlex)

arXiv:1904.04217 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Empirical economists are often deterred from the application of fixed effects binary choice models mainly for two reasons: the incidental parameter problem and the computational challenge even in moderately large panels. Using the example of binary choice models with individual and time fixed effects, we show how both issues can be alleviated by combining asymptotic bias corrections with computational advances. Because unbalancedness is often encountered in applied work, we investigate its consequences on the finite sample properties of various (bias corrected) estimators. In simulation experiments we find that analytical bias corrections perform particularly well, whereas split-panel jackknife estimators can be severely biased in unbalanced panels.

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47
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111
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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
1Fernández-Val, Iván, Weidner, Martin (2018) Fixed Effects Estimation of Large-T Panel Data Models1.00083100%
2Fernández-Val, Iván, Weidner, Martin (2016) Individual and time effects in nonlinear panel models with large N, T0.98828596%
3Stammann, Amrei (2018) Fast and feasible estimation of generalized linear models with high-dimensional k-way fixed effects self0.9416383%
4Arellano, Manuel, Hahn, Jinyong, Blundell, Richard, Newey, Whitney,… (2007) Understanding Bias in Nonlinear Panel Models: Some Recent Developments0.92843100%
5Cruz-Gonzalez, Mario, Fernández-Val, Iván, Weidner, Martin (2017) Bias corrections for probit and logit models with two-way fixed effects0.84333100%
6Dhaene, Geert, Jochmans, Koen (2015) Split-panel Jackknife Estimation of Fixed-effect Models0.81142100%
7Hyslop, Dean R (1999) State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women0.81142100%
8Gaure, Simen (2013) lfe: Linear group fixed effects0.7373367%
9Fernández-Val, Iván (2009) Fixed effects estimation of structural parameters and marginal effects in panel probit models0.73732100%
10Greene, William H (2004) The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects0.73732100%

Showing the top 10 of 47 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
1Debiased Fixed Effects Estimation of Binary Logit Models with Three-Dimensional Panel Data0.40511