Minji Bang, Wayne Yuan Gao, Andrew Postlewaite, Holger Sieg
arXiv 14 Jan 2021 · Econometrics · publishedJournal of Econometrics (2022)
arXiv:2101.05847 · PDF · DOI · OpenAlex · Extracted main text
This paper develops a new method for identifying econometric models with partially latent covariates. Such data structures arise in industrial organization and labor economics settings where data are collected using an input-based sampling strategy, e.g., if the sampling unit is one of multiple labor input factors. We show that the latent covariates can be nonparametrically identified, if they are functions of a common shock satisfying some plausible monotonicity assumptions. With the latent covariates identified, semiparametric estimation of the outcome equation proceeds within a standard IV framework that accounts for the endogeneity of the covariates. We illustrate the usefulness of our method using a new application that focuses on the production functions of pharmacies. We find that differences in technology between chains and independent pharmacies may partially explain the observed transformation of the industry structure.
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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.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Griliches, Z. and J. Mairesse (1998) Production Functions: The Search for Identification, in | 0.928 | 4 | 3 | 100% |
| 2 | Olley, G. S. and A. Pakes (1996) The Dynamics of Productivity in the Telecommunications Equipment Industry | 0.874 | 8 | 2 | 100% |
| 3 | Ackerberg, D. A., K. Caves, and G. Frazer (2015) Identification properties of recent production function estimators | 0.874 | 7 | 2 | 100% |
| 4 | Newey, K. and D. McFadden (1994) Large sample estimation and hypothesis testing | 0.874 | 6 | 3 | 67% |
| 5 | Levinsohn, J. and A. Petrin (2003) Estimating production functions using inputs to control for unobservables | 0.874 | 5 | 2 | 100% |
| 6 | Newey, W. K (1994) The asymptotic variance of semiparametric estimators | 0.822 | 9 | 3 | 56% |
| 7 | Ridder, G. and R. Moffitt (2007) The Econometrics of Data Combination | 0.737 | 3 | 2 | 100% |
| 8 | Abowd, J. and F. Kramaz (1999) THe Analysis of Labor Markets Using Matched Employer-Employee Data | 0.644 | 2 | 2 | 100% |
| 9 | Abrevaya, J. and S. G. Donald (2017) A GMM approach for dealing with missing data on regressors | 0.644 | 2 | 2 | 100% |
| 10 | Angrist, J. D. and A. B. Krueger (1992) The effect of age at school entry on educational attainment: an application of instrumental variables with moments from two samp… | 0.644 | 2 | 2 | 100% |
Showing the top 10 of 58 scored citations.