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A Simple Estimator for Quantile Panel Data Models Using Smoothed Quantile Regressions

Liang Chen, Yulong Huo

arXiv 12 Nov 2019 · Econometrics · publishedEconometrics Journal (2020)

arXiv:1911.04729 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Canay (2011)'s two-step estimator of quantile panel data models, due to its simple intuition and low computational cost, has been widely used in empirical studies in recent years. In this paper, we revisit the estimator of Canay (2011) and point out that in his asymptotic analysis the bias of his estimator due to the estimation of the fixed effects is mistakenly omitted, and that such omission will lead to invalid inference on the coefficients. To solve this problem, we propose a similar easy-to-implement estimator based on smoothed quantile regressions. The asymptotic distribution of the new estimator is established and the analytical expression of its asymptotic bias is derived. Based on these results, we show how to make asymptotically valid inference based on both analytical and split-panel jackknife bias corrections. Finally, finite sample simulations are used to support our theoretical analysis and to illustrate the importance of bias correction in quantile regressions for panel data.

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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
1Canay, I. A (2011) A simple approach to quantile regression for panel data1.000445100%
2Besstremyannaya, G. and S. Golovan (2019) Reconsideration of a simple approach to quantile regression for panel data1.00093100%
3Kato, K., A. F. Galvao, and G. V. Montes-Rojas (2012) Asymptotics for panel quantile regression models with individual effects1.00093100%
4Galvao, A. F. and K. Kato (2016) Smoothed quantile regression for panel data0.9619389%
5Hahn, J. and W. Newey (2004) Jackknife and analytical bias reduction for nonlinear panel models0.51121100%
6Abrevaya, J. and C. M. Dahl (2008) The effects of birth inputs on birthweight: evidence from quantile estimation on panel data0.40511100%
7Amemiya, T (1982) Two stage least absolute deviations estimators0.40511100%
8Ando, T. and J. Bai (2019) Quantile co-movement in financial markets: A panel quantile model with unobserved heterogeneity0.40511100%
9Arellano, M. and S. Bonhomme (2016) Nonlinear panel data estimation via quantile regressions0.40511100%
10Chen, L (2019) Two-step estimation of quantile panel data models with interactive fixed effects self0.40511100%

Showing the top 10 of 20 scored citations.