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Least Squares Estimation Using Sketched Data with Heteroskedastic Errors

Sokbae Lee, Serena Ng

arXiv 15 Jul 2020 · Statistics — Machine Learning

arXiv:2007.07781 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Researchers may perform regressions using a sketch of data of size $m$ instead of the full sample of size $n$ for a variety of reasons. This paper considers the case when the regression errors do not have constant variance and heteroskedasticity robust standard errors would normally be needed for test statistics to provide accurate inference. We show that estimates using data sketched by random projections will behave `as if' the errors were homoskedastic. Estimation by random sampling would not have this property. The result arises because the sketched estimates in the case of random projections can be expressed as degenerate $U$-statistics, and under certain conditions, these statistics are asymptotically normal with homoskedastic variance. We verify that the conditions hold not only in the case of least squares regression when the covariates are exogenous, but also in instrumental variables estimation when the covariates are endogenous. The result implies that inference, including first-stage F tests for instrument relevance, can be simpler than the full sample case if the sketching scheme is appropriately chosen.

Citation extraction

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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
1Ma, Zhang, Xing, Ma, and Mahoney (2020) Asymptotic Analysis of Sampling Estimators for Randomized Numerical Linear Algebra Algorithms1.00053100%
2Lee and Ng (2020) An Econometric Perspective on Algorithmic Subsampling0.64422100%
3Ahfock, Astle, and Richardson (2020) Statistical properties of sketching algorithms0.64422100%
4Hall (1984) Central limit theorem for integrated square error of multivariate nonparametric density estimators0.5113233%
5Woodruff (2014) Sketching as a tool for numerical linear algebra0.5112250%
6Angrist and Krueger (1991) Does compulsory school attendance affect schooling and earnings?0.51121100%
7Angrist and Krueger (1992) The Effect of Age at School Entry on Educational Attainment: An Application of Instrumental Variables with Moments from Two Samp…0.40511100%
8Angrist and Krueger (1995) Split-Sample Instrumental Variables Estimates of the Return to Schooling0.40511100%
9Inoue and Solon (2010) Two-Sample Instrumental Variables Estimators0.40511100%
10Liu and Dobriban (2020) Ridge Regression: Structure, Cross-Validation, and Sketching0.40511100%

Showing the top 10 of 28 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
1Fast Inference for Quantile Regression with Tens of Millions of Observations0.40511
2On Using The Two-Way Cluster-Robust Standard Errors0.40511
3SLIM: Stochastic Learning and Inference in Overidentified Models0.00011